תרגום התקנון נכון ליום 1.7.11 לאנגלית - לא סופי ... · 2018. 2....
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ACUM Ltd Articles of Association
as amended at
a special general meeting of
members held on
March 30th, 2014
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Table of Contents
Table of Contents
Chapter One – General ................................................................................. 5 1. Introduction ................................................................................................ 5 2. Private Company ....................................................................................... 9 3. Company objects ....................................................................................... 9 4. Limit of Liability .......................................................................................... 9 4a. Compliance with the terms set out by the Restrictive Trade Practices Tribunal …………………………………………………………………………....10
Chapter Two- Company Share Capital 10
5. Share Capital ........................................................................................... 10 6. Rights Attached to Each Class of Shares ................................................ 10 7. Rights Awarded to Each Class of Shares ................................................ 11 8. Criteria for Share Issue ............................................................................ 12 9. Handling Copyright of Members or Affiliated Foreign Societies/Companies .......................................................................................................... ………18 10. Transfer of Rights to the Company ........................................................ 19 11. Restriction of Assignment of Rights in a Work ....................................... 20 12. Inheritance Share .................................................................................. 20 13. Expiry of Membership in the Company .................................................. 22 14. Issue of Other Shares and Securities .................................................... 26 15. Calls for Payment .................................................................................. 27 16. Company Shareholder Register and Issue of Share Certificates ........... 28 17.Trustee as Shareholder .......................................................................... 29 18.Transfer of Company Shares .................................................................. 29 19. Bearer Share Certificates....................................................................... 30 20. Lien on Shares ....................................................................................... 30 21.Alteration of Share Capital ...................................................................... 31
Chapter Three – General Meeting ............................................................... 33 22. Powers of the General Meeting ............................................................. 34 23. Annual, Extraordinary and Class General Meetings .............................. 35 24. Convening General Meetings ................................................................ 36 25. Agenda at the General Meeting ............................................................. 39 26. Deliberations at General Meetings ......................................................... 39 27. Member’s Votes ..................................................................................... 41 28. Minutes of the General Meeting ............................................................. 43
Chapter Four – The Board of Directors…………………………………….…..44
29.Qualification of directors……………………………………………………...44 29.a Non-executive directors…………………………………………………….45 30. Compositions of Board of Directors……………………………………...…46 31. Honorary Members of the Board of Directors…………………………..…48
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32. Officers in the Board of Directors……………………………………….….49 33. Powers of the Board of Directors……………………………………….….50
33A. The Council………………………………………………………………....51 34. Election of Directors who are not non-executive directors and Their Period of Office ....................................................................................................... 51 35. Election proceedings for directors .......................................................... 52 36. The Election Committee......................................................................... 56 37. Termination of a Director's Office........................................................... 57 38. Proceedings of the Directors .................................................................. 60 39.Convening a meeting of the Board of Directors ...................................... 60 40.Summoning a meeting of the Board of Directors .................................... 61 41.Agenda for meetings of the Board of Directors ....................................... 62 42.Quorum for meetings of the Board of Directors ...................................... 62 43.Company Rights of Signature and Power of Attorney On Its Behalf ....... 64 44.Directors’ Powers with regard to expenses ............................................. 65 45.Support Fund .......................................................................................... 65 46.Minutes of the Board of Directors ........................................................... 66 47.Company’s Registered Office ................................................................. 66 48.Board of Directors’ Committees .............................................................. 66 49. Additional committees .......................................................................... 67 50.Inspection Committee ............................................................................. 68 51. Arbitration between shareholders and Directors .................................... 70 51a. Arbitration and Appeals Committee……………………………………....75
Chapter 5 – Company Officers who are not Directors, the Company's Auditor ..................................................................................................................... 77 52.General Manager .................................................................................... 77 53.Secretary and Other Officers in the Company ........................................ 80 54.Company's Auditor .................................................................................. 81
Chapter 6 – Distribution of Royalties ........................................................... 81 55.Financial Regulations ............................................................................. 81 56.Acum Member Welfare Fund .................................................................. 85
Chapter 7– Officers' Insurance, Indemnification and Waiver of Liability .......... ................................................................................................................................... 85 57.Officers' insurance .................................................................................. 86 58.Indemnification of Officers ...................................................................... 86 59.Waiver of liability ..................................................................................... 87
Chapter 8– Dissolution and Reorganization of the Company ...................... 88 60.Dissolution ......................................................................................................... 88 61.Reorganization of the Company ............................................................. 88
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Chapter 9– Miscellaneous ......................................................................... 89 62. Accounts……………………………………………………………………....89 63. Notices………………………………………………………………...………90
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Chapter 1 – General
1. Introduction
1.1 Each of the words below shall have the meaning appearing opposite it below:
Affiliated Foreign Company or Society
Each of the Societies or companies in other countries whose objects are similar to those of the Company, affiliated with the Company from time to time.
Stage Performance Public performance of dramatic or musical-dramatic works, as defined below, performed live on stage using means such as: acting, dance, direction, costumes, sets, all or any of the above.
In writing In writing or printed, or part in writing and part printed. Shareholder
Anyone registered as a shareholder in the Company’s shareholder’s register.
Financial statements Balance sheets, statement of profits and loss, reports on changes in equity capital and cash flow reports, including the explanations thereto.
Law The provisions of any law applicable in the State of Israel.
Director Non-executive director Making available to the public
As defined in section 1 of the Companies Act, including alternates and authorized representatives. A– Non-executive director as set forth in section 29a of these Articles. Doing an act in respect of a Work, so that the public will have access thereto from a place and at a time of their choosing
The Council The Company’s Board of Directors sitting together with the substitute directors.
Public Performance Right Including, the right to publicly perform any works from the Company’s repertoire anywhere in the world, using any means and any form, using methods known today or developed in future, including radio and television broadcasts, save for exceptions named below; the right does not include the right to perform or to authorize complete or partial stage performance of dramatic works and dramatic-musical works.
Synchronization Right The right to reproduce a musical or literary work on a
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soundtrack of an audio-visual work, for any purpose, including for use on a computer or any other use existing today or to be developed in future, but not including any of the following: (1) Reproducing a dramatic or dramatic-musical work in full
or any material parts thereof, however, reproducing musical works, with or without words, separately – is included in the right of synchronization.
(2) Reproducing a literary work developed for a screenplay; (3) Reproducing a work authored especially for the audio-
visual work, save reproduction of a musical composition especially composed as stated, with or without the words of the soundtrack, for public distribution of tapes or other devices; however, for a musical composition ordered for broadcasting only, the right to reproduce for the purpose of producing tapes or other devices designated for public distribution belongs to the Company.
Reproduction Right The right to reproduce works or any part thereof, in their
original form or after processing and editing, using any means or form, after at least one edition of such a work has been printed and published. Right to reproduce shall not apply when the reproduction in question is of a novel or play in full, a collection of works all by the same author, and/or of any musical composition in full which is not a melody with or without words only.
Rental Right The right to loan or rent a recorded copy of any work for commercial purposes.
Recording Right The right to record compositions using means existing today or to be developed in future, including sound recording or picture recording with sound, including reproduction of works.
Broadcasting Right The right to transmit and distribute sound or pictures or a combination of sounds and pictures to the public, whether through land line, wireless or in any other form, existing today or to be invented or used in future, including television broadcasts, internet transmissions and broadcasts where a person transmits another person’s broadcast, simultaneously with the other person’s broadcast.
Holder of Inheritance Share
The heir of a deceased member who comes in place of the member.
Membership for Israel An author who is not a resident of Israel, or a publisher
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Only Share whose main office is not located in Israel, and is a member of one of the Associated Societies and has transferred all his rights to the Company, at least with regard to the State of Israel; and an Israeli resident who the Board of Directors has resolved, at its exclusive discretion, to accept as a member for Israel only.
The Companies Act The Companies Act, 5759 – 1999.
The Securities Act The Securities Act, 5728 – 1968.
Business Day Sundays to Thursdays, except official and national holidays in Israel.
Work A work which the Company holds copyright for, or is under the Company’s supervision, and is set forth in the royalties distribution table as set from time to time.
Audio-Visual Work Including a work made up of a series of pictures related to each other, and accompanying sound if any, designated to be presented by appropriate instruments.
Dramatic and Dramatic-Musical Works
(“Big Rights”) in these Articles means: Works such as operas, plays, audio-visual shows, musicals, pantomimes and ballet with performance time of 20 minutes at least, having no more than four composers, where the words and/or music from which the work is made up were composed especially for such work.
Writing Print or any other form of printing of words, including documents, transferred in writing by facsimile, telegram, telex, electronic mail, computer, or through any other means of electronic communication, creating or allowing the creation of a copy and/or printout of the document.
Music Publisher Any publisher whose main area of business is publication and/or distribution of music and lyrics of a variety of composers.
Composer Including a person who adapts any musical composition.
Royalties Distribution Table
The table established by the Board of Directors from time to time, for the appraisal of works through a number of points of distribution of royalties between members and between partners in copyright. Wherever the term “table” or “work appraisal table” appears in these Articles – reference is to the “Royalties Distribution Table”.
Office The Company’s registered office.
Securities Shares, debentures, capital bills, convertible bonds and
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certificates, awarding rights to such securities, issued by the Company.
Writer Including a person who adapts, translates or authors a work of literature.
New Immigrant Any person holding a lawfully issued Oleh Certificate.
The Companies Ordinance
The Companies Ordinance [New Version], 5733 – 1983.
Special Majority Special majority of the board of directors
A majority of three quarters at least of votes of Shareholders present at the shareholders meeting having the right to vote. A majority of at least three quarters of the members of the board serving at such time on the board of the company.
Simple Majority Simple majority of the board of directors
A majority of Shareholders who are present at the shareholder meeting and who are eligible to vote A majority of members of the board of directors present at the board of directors meeting.
Acum’s Repertoire Includes: All works for which rights have been assigned to Acum, by a deed of assignment under Article 10 herein; and all works in which the Company is authorized to enforce copyright with regard thereto from time to time, by virtue of agreements with affiliated Societies, by virtue of agreements with other bodies or persons, or in any other manner.
Broadcast Including television broadcasts, transmission by internet and any transmission of sounds or pictures or of both together, using any technology or any other form whatsoever, whether existing today or to be developed or used in future
Articles The Company Articles as set forth herein, or as modified, whether explicitly or by law.
Company Regulations Regulations issued by virtue of the Companies Act.
Securities Regulations Regulations issued by virtue of the Securities Act. Words of the singular number shall include the plural, and vice versa.
Words of the masculine gender shall include the feminine.
Words of persons shall include legal bodies.
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The provisions of Sections 3-10 of the Interpretation Act, 5741 – 1981 shall apply,
mutatis mutandis, with regard to interpretation of these Articles in the absence of any
other provision in respect thereof, and provided that such application is not inconsistent
with any matter provided for herein.
Words or expressions not defined in this Article shall be interpreted as provided in the
Companies Act, and if no interpretation is provided in the Companies Act, then such
word or expression shall be interpreted as provided in the Securities Act, and if such
word or expression has no such interpretation, such term shall be interpreted as
provided in any other Act, unless such interpretation be contrary to the written subject
matter or to the content thereof.
If these Articles refer to any provision of the Companies Act, and such provision or
regulation has been annulled, the original provision mentioned shall be deemed to have
effect, as if such were part of these Articles, unless prohibited by law.
2. Private Company
The Company is a private Company, as defined in section 1 of the Companies Act.
3. Company objects
The Company shall deal in all legal dealings.
4. Limit of Liability
The liability of the members is limited, each to the payment of the amount such member
undertook to pay for the shares allotted at the time of allotment. The liability of members
who were members of the Company limited by guarantee only shall be NIS 1 only.
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4A. Compliance with the terms set out by the Restrictive Trade Practices
Tribunal
These Articles are subject to "the terms for the activity of ACUM" as approved by
the Restrictive Trade Practices Tribunal (in these Articles: "the Terms") as they
may be from time and these Articles shall be interpreted in accordance with the
Terms).
Chapter Two – Company Share Capital
5. Share Capital
5.1 The Company’s registered share capital is 39,000 shares of 1 NIS each, divided into:
5.1.1 9,600 ordinary shares of 1 NIS each.
5.1.2 9,600 participation shares of 1 NIS each.
5.1.3 9,600 royalty shares of 1 NIS each.
5.1.4 200 honorary shares of 1 NIS each.
5.1.5 600 membership for Israel only shares of 1 NIS each.
5.1.6 9,500 inheritance shares of 1 NIS each.
6. Rights Attached to Each Class of Shares
6.1 The rights attached to all types of shares are as set forth in Article 7 below.
6.2 No Company shareholder shall hold more than one share.
6.3 Transfer of shares shall be carried out only in accordance with the provisions
of these Articles.
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6.4 A shareholder shall not be entitled to hold more than one ordinary share in
the Company. A person who controls a corporate body which holds a share
in the Company and is entitled under these Articles to a further share, this
further share shall be a royalty share. This provision shall apply to an officer
in such a body corporate.
If at the time of introducing this Article, a shareholder holds more than one
ordinary share, the share that was allotted later than the other one shall be
converted into a royalty share. When a shareholder ceases to be the holder
of an ordinary share, the royalty share shall be converted into an ordinary
share, provided that it was such a share in the past.
7. Rights Awarded to Each Class of Shares
7.1 A holder of an ordinary share has the following rights:
(1) To receive invitations, participate and vote at the General Meetings.
(2) To elect and be elected to the Company’s organs.
(3) The right to royalties.
(4) Every ordinary shareholder has one vote for each share held.
7.2 A holder of a participation share has all rights held by a holder of an ordinary
share, expect for the right to elect and be elected to the Company’s organs
and except for the right to vote at the General Meeting.
7.3 A holder of a royalty share has the right to receive royalties for use of his
works only. A royalty share does not award any other rights.
7.4 A holder of an honorary share has only the right to receive invitations to
General Meetings, and to receive any material distributed to Company
members.
7.5 A holder of a membership for an Israel only share has only the right to
receive royalties as the board of director resolves.
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7.6 A holder of an inheritance shares has the right to royalties only.
7.7 No share other than an ordinary share awards any rights whatsoever
regarding any settlement with the Company or the right to convene a class
shareholders meeting.
7.8 The provisions of these Articles regarding shares shall apply, mutatis
mutandis, with regard to other securities if and so far as any such securities
are issued by the Company.
7.9 The Company has the power to purchase and/or redeem its shares in
accordance with the provisions of these Articles and the Companies Act.
8. Criteria for Share Issue
8.1 (A) Dealing with a candidacy for share purchase allotment:
The Company Board of Directors shall deal with an application for issue of a
share submitted by a composer and/or a writer, citizen or permanent resident
of Israel, or by a limited company in which such aforesaid composer and/or
writer is the sole shareholder and sole director; or a publisher who is a citizen
or permanent resident of Israel; or a corporation duly registered in Israel,
after such has submitted applications to the Board of Directors using the
forms customarily used from time to time by the Company, and has filled out
all information required by the Board of Directors.
(B) The Company’s Board of Directors may provide for a detailed procedure for
submitting an application for the transfer of the share of a member who is a
composer and/or writer, citizen or permanent resident of Israel, to a limited
company in which he is the sole shareholder and sole director (such a
company shall hereinafter be referred to as: “a sole member company”, and
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the sole shareholder in the company shall be referred to as: “the sole
shareholder”).
All such applications shall be submitted according to the aforesaid
procedure.
(C) A Sole Member Company shall be entitled to assign to the Company by a
deed of assignment the copyright in works created by its sole shareholder
only.
(D) When a sole shareholder dies, the following provisions shall apply:
(1) The share held by the sole shareholder shall become a deferred share,
awarding its holder only the right to receive 1 NIS upon dissolution of the
Company;
(2) The heir or heirs of such deceased sole shareholder may ask the
Company to issue to him or to them an Inheritance Share, and the
provisions of Articles 8.11 and 12.2 shall apply.
8.2 The Company’s Board of Directors shall deal with an application by a music
publisher for an allotment of a share only if the applicant is a physical person,
or a duly incorporated corporation, after the publisher has attached ten small
works (such as songs or musical pieces) of at least five different composers,
Company shareholders, or two large works (with or without words) of two
different composers, Company shareholders, which works have been
published by the applicant in a printed, finished graphic form or a recording,
for commercial distribution, and provided further that contractual engagement
has been made by the applicant with those Company shareholders. A work
authored by the music publisher himself shall not be taken into account.
8.3 Notwithstanding the aforesaid in Article 8.2 above, the Board of Directors
shall also deal with an application for allotment of a share submitted by a
music publisher who publishes only its own musical works and/or works
authored by him together with others, if in the opinion of the Board of
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Directors there is justification for such an allotment. A share allotted under
this Article shall be a Royalty Share, which may be converted into another
share if the conditions prescribed in Article 8.2 above are fulfilled.
8.4 When dealing with a share allotment in the Company, the Board of Directors
may also take into account a candidate’s income from royalties, and any
other factors from the point of view of the Company objects and
management.
8.5 A candidate may submit an application for a Company share as stated in Article 8.8 below. An Application is to be submitted to the Company’s Board of Directors in writing, in the form decided upon by the Board of Directors from time to time. If and insofar as the Company’s Board of Directors approves the application, the applicant hall be allotted a share of the class the Board of Directors resolves upon, beginning as of the date given in the certificate. The Board of Directors shall deliberate and resolve from time to time the conversion of a share of a certain class to another class, according to the circumstances of each case. A shareholder who believes he is entitled to convert his share to another class of shares, according to criteria set forth from time to time by the Board of Directors, may apply to the Arbitrator, whose decision shall be final. Inheritance Shares , Membership for Israel Only Share and Honorary Shares are not convertible.
8.6 The Board of Directors is not obligated to announce its grounds for rejecting
a candidate’s application for share allotment.
8.7 If a candidate’s application for share allotment is rejected by the Board of
Directors, the candidate may appeal to the Arbitrator; a candidate whose
appeal is rejected by the Arbitrator shall not have the right to any other
appeals.
8.8 Any person who fulfills the conditions for allotment of a share, as set forth in
these Articles, may submit an application for share allotment (“Share
Application”), subject to the Articles’ limitations regarding the class of share.
8.8a. The board of directors may establish from time to time criteria for the
determination of those eligible to be allocated a share of the company or
conversion of a share held by a shareholder into another share. Approval
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and the determination of the criteria shall be adopted by the board of
directors by a special majority vote.
8.9 The majority required for a resolution of share allotment or conversion
A resolution regarding allocation of any share in the Company, including a
resolution regarding the conversion of any share into another class of share,
shall be adopted by the board of directors by a simple majority, unless the
allocation is not in accordance with the criteria that were established by the
board in accordance with article 8.8a above, whereby the resolution will be
adopted by a special majority of the board.
8.10 New Immigrants
A new immigrant who is a composer or writer may apply for membership as
stated in Article 8.5 above, if he can in any way prove that he was a
composer or writer in his country of origin, and a member of a Society of
composers or writers.
A new immigrant who is the heir of a deceased composer or writer shall be
allotted one Inheritance Share, if he can in any way prove that the deceased
composer or writer was a member of a composers' or writers' Society in his
country of origin. A member who is a new immigrant shall receive royalties
for the use of his work, as if it had been first composed or published in Israel,
even if any doubt exists regarding his status under Israeli law.
8.11 Inheritance Shares
The Board of Directors may allot an Inheritance Share also to the heir of a
person who had been eligible to receive a share in the Company under the
conditions set forth in Articles 8.1 to 8.10. If such an Inheritance Share is
allotted, the provisions of Article 12 shall apply.
8.12 Honorary Shares
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The Board of Directors may allot an Honorary Share to a person who is not a
writer or composer, and has made a special contribution to the advancement
of the objects of the Company or of the copyright or of works of art in Israel.
A person to whom an Honorary Share is allotted shall give his consent to
such allotment.
8.13 Membership for Israel Only Shares
The Board of Directors may, in special cases, and at its exclusive discretion,
allot a Share For Israel Only. Such shareholder shall be entitled to royalties
only, as the Board of Directors may decide. The provisions of this Article
shall also apply to a company shareholder who has been accepted as a
member of an affiliated Society and wishes to remain a shareholder in the
Company with regard to his rights in Israel and in countries not given over to
administration of the affiliated Society which such member joined.
8.14 A shareholder who ceases to be an Israeli resident, as mentioned in Article
8.13 above, and who received an approval as stated in Article 8.13 above,
and later returns to Israel as a resident, shall not continue to benefit from
rights under the aforementioned Article 8.13, and must decide whether he
desires to continue holding a share in Acum. If such a member decides to
continue holding a share in Acum, he must resign from any other foreign
Society within one year of his return to Israel, and assign all rights throughout
the world to Acum.
8.15 Subject to the provisions of Article 8.13 above, a shareholder who is a
resident of Israel may not hold shares in both Acum and other Societies
abroad, save in such cases where the shareholder has been given notice
under Article 9.3 below, or by approval of the Board of Directors.
8.16 Employment in the Company
A Company employee who is a composer and/or writer may hold a Royalties
Share only. A holder of a Participation Share or an Ordinary Share who
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desires permanent employment with the Company shall not be accepted
unless he agrees to the conversion of his share to a Royalty Share. If the
shareholder has ceased employment with the Company, his Royalty Share
shall be converted to a share of the class he held before he was accepted as
a Company employee.
8.17 A Body Corporate as a Shareholder
If a person or a number of persons are controlling members of a company
limited or of any lawfully incorporated body, have been accepted as
Company shareholders as music publishers, and have founded a new
company limited or new business in which that same person or persons
control also the new Company or the new business, the Company may
accept the new company or the new business as a shareholder in Acum as
a music publisher, provided it fulfills the conditions of the provisions of Article
8.2, and further provided it receives only a Royalty Share.
8.18 Limited companies or other businesses which are music publishers, who
have been accepted as royalty shareholders, and are under the control of
one person or a number of persons, shall remain royalty shareholders at all
times, save for one of the aforesaid limited companies or businesses, which
may receive another class of share, subject to the provisions of these
Articles.
8.19 A person or a body corporate who is an agent or an exclusive representative
of a publisher who is a member of a Foreign Affiliated Society may be
entitled to a Royalty Share only.
8.20 If a publisher who holds an ordinary share ceases to comply with the
conditions required under these Articles for the allotment of shares under
Article 8.2, the Board of Directors shall decide to convert his share to a
Royalty Share.
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9. Handling Copyright of Members or Affiliated Foreign Societies/Companies
9.1 The Company is entitled by authorization of a foreign Society to administer
its copyright in works in a manner even more comprehensive than that
defined in these Articles.
9.2 The Company is entitled to accept authorizations from owners of copyright in
the areas the Company deals with who are not shareholders in the
Company, including from owners of performance rights and act in
accordance therewith.
9.2A Notwithstanding what is stated in the Deed of Assignment, the Board of
Directors may, at a meeting at which all members of the board are present,
by a special majority of the board, decide that the Company shall or shall
not administer a specific right or rights of those which are included in the
Deed of Assignment (hereinafter: “the Rights”).
9.3 In special cases, the Company may at any time notify any shareholder in
writing, even after receiving shareholders’ notice under Article 10.4, that it
shall not administer all or any part of the rights assigned to the Company in
a particular work or works which the shareholder wrote, composed or
published.
9.4 Shareholders may notify the Company in writing that they personally shall
administer public performance rights in a particular show, provided that at
least 95% of the works played at such a show were written by that
shareholder. If a shareholder has so notified the Company, including giving
details of the works, the Company shall not handle the performance rights
with regards to that shareholder’s works at that show, unless the Board of
Directors has otherwise resolved.
“Show” in this sub-article shall mean public performance of protected works.
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10. Transfer of Rights to the Company
10.1(A) Simultaneously with and as a condition of allotment of any share, a
candidate must sign a deed of assignment in the form prescribed from
time to time by the Board of Directors. The deed of assignment, signed
by the candidate, shall be interpreted in accordance with these Articles,
as they are from time to time.
10.1(B) A shareholder shall assign the following rights to ACUM in the Deed of
Assignment: public performance, broadcasting, recording,
synchronization, reproduction and making the Work available to the
public. This with regard to musical works and literary works.
Any shareholder of the Company is entitled to notify the Company that
he wishes to administer certain rights or certain works by himself
(hereinafter: "Exclusion"), such Exclusion to be in accordance with the
Terms. In the absence of any Terms, the Exclusion shall be subject to a
decision of the Board of Directors.
10.2 The Deed of Assignment shall not apply to dramatic works and dramatic-
musical works (hereinafter in this Article: “Grand Rights”), except for the
purpose of recording, broadcasting on the radio and television, and
performance of non-stage performances.
10.3 If a shareholder has chosen to assign Grand Rights to the Company, the
Company may accept and administer them, in the same manner as any
other right assigned to it.
10.4 A shareholder must notify the Company once per every time period as
determined by the Board of Directors, of any new work authored by him,
using the form prescribed by the Board of Directors. The Company may
refuse to include any work not so notified to the Company as a work
eligible for distribution of royalties.
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10.5 The provisions of Article 10.4 shall apply mutatis mutandis with regard to
publishers in respect of any work in which such publisher received
publishing rights.
10.6 The Company has the right to demand that a shareholder sign an
additional deed of assignment worded as prescribed from time to time by
the Board of Directors, and a shareholder is obligated to sign such
additional deed of assignment upon the Board of Directors’ demand.
10.7 If a shareholder has not signed such deed of assignment within 30 days
of the date on which the deed of assignment was sent for signing, the
Board of Directors may delay making any payment to this shareholder,
until the fulfillment of the aforesaid obligation under Article 10.6 above.
11. Restriction of Assignment of Rights in a Work
11.1 No shareholder shall assign or use rights he has assigned to the Company,
unless he has received in advance the Company’s written permission to do so.
11.2 Subject to the provisions of Article 10.1, a shareholder may not engage under
any contract under which he writes or is obligated to write or author a work for
an employer who is not a Company shareholder, unless the contract explicitly
states that the shareholder’s rights in the work shall be assigned to the
Company. A shareholder engaging under such aforesaid contract must notify
the Company of such engagement within 30 days of signing.
12. Inheritance Share
12.1 Upon the decease of a shareholder and subject to the provisions of this Article,
the Board of Directors shall allot an Inheritance Share to the heir or heirs of the
deceased shareholder (in this Article "the Deceased"). The Deceased's share
shall be cancelled simultaneously with the allotment of the Inheritance Share.
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If the heir or heirs of the Deceased pass away, the provisions of this Article and
Articles 12.4A and 12.4B hereunder shall apply mutatis mutandis.
12.2 The Deceased’s heir or heirs shall submit to the Company an application for the
allotment of the Inheritance Share to them. The application shall be made in
writing, and a certified copy of the inheritance order in respect of the
Deceased's estate or probate of the Deceased’s will, as the case may be, shall
be attached thereto.
12.3. The Board of Directors, upon receiving such application and being satisfied
that the applicant or applicants are indeed the Deceased’s heirs, shall allot the
inheritance share to him or them, as the case may be.
12.3.A If upon decease of a shareholder no application for allotment of the
Inheritance Share is submitted within three years from the date of decease
(hereinafter in this article: "the effective date"), as prescribed in Article 12.2, the
deceased's share shall be cancelled, or will become a deferred share, if for
some reason the share could not be cancelled, and the provisions of Article
13.1.4 will apply, mutatis mutandis, unless the Board of Directors decides,
upon its sole and absolute discretion to postpone the date of the cancellation
of the share to another date, which will be decided by resolution of the Board of
Directors, and the Board of Directors will announce its grounds in its minutes.
12.4 During the period from the day of Deceased’s death until the date of allotment
of the Inheritance Share to the Deceased’s heir or heirs, as prescribed in
Article 12.1, or until the date of the cancellation of the Deceased's Share, as
prescribed in Article 12.3A, whichever is earlier, the Company shall continue to
administer and enforce all the rights assigned to the Company by the
Deceased, in order to ensure the rights of the heirs. After the allotment of the
Inheritance Share, all the monies accrued to the heirs during the period from
the day of Deceased’s death until the date of allotment of the Inheritance
Share, will be transferred to the heirs.
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12.4A The Board of Directors shall deal with any application of any or some of the
Deceased’s heirs (hereinafter: the “Heirs”) to allot the Inheritance Share to a
limited company (hereinafter: the “Heirs’ Company”), provided that:
(A) Only the Heirs, one or more of them shall be the shareholders and
directors of the Heirs’ Company;
(B) Only the works authored by the Deceased shall be registered in the
name of the owners of an Inheritance Share - physical people and/or a
limited company.
The Board of Directors may provide for a detailed procedure for filing an
application for allotment of an Inheritance Share to an Heirs’ Company.
All such applications shall be submitted to the Company in accordance
with such aforesaid procedure.
12.4B Notwithstanding any provision in these Articles, the Board of Directors
may deal with and decide on a written application of the holder of an
Inheritance Share, to transfer the share or any part thereof to his relative.
The Board of Directors may set up a detailed procedure for the
submission of such an application.
For the purpose of this Article: a "relative" as defined in the Companies
Act 1999.
12.4C In case the Deceased's Share is cancelled, as prescribed in Article 12.3A,
the Company will act with the monies accrued to the heirs of the
Deceased, according to the law.
12.5 The rights of a holder of an Inheritance Share are as stated in Article 7.6
above.
13. Expiry of Membership in the Company
23
13.1 Subject to the provisions of Article 13.1.4 below, a shareholder whose
share has been redeemed shall be entitled to the rights assigned by him to
the Company and the nominal sum paid for the purchase of the share
returned to him. A shareholder’s share in the Company shall be redeemed
in the following cases:
13.1.1 Rights validity period
A shareholder's membership shall terminate upon the expiration of
the term of copyright in the shareholder’s works, in accordance with
the provisions of the copyright law applicable at the relevant time.
If the law allows collection of royalties after this period, the Company
may collect royalties for the purpose prescribed by law.
13.1.2 Expiry of shares and redemption shares
A shareholder may deliver a written notice to the Company notifying
of his intent to resign from the Company. Such notice shall come into
effect on 1st January of the year following the date of delivery of such
notice, and the share shall expire at that time.
13.1.3 Upon receipt of such aforesaid written notice, the shareholder’s duty
to notify the Company of works created shall cease from the date on
which notice was given (as stated in Article 10.4 above), and the
deed of assignment of rights given to the Company shall be
cancelled, subject to the provision of Article 13.1.4.
13.1.4 The Company shall delete the name of the shareholder from the list
of shareholders, and that shareholder’s repertoire of the works shall
no longer be part of the Company’s repertoire; however, the rights
shall remain a part of the Company's repertoire until the expiration of
a global license granted by the Company for the use of its repertoire;
or until the termination of any pending legal proceedings involving the
Company's repertoire.
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13.1.5 The account of a shareholder who has given such aforesaid notice
and whose membership has been terminated shall be settled upon
the Company’s first distribution of royalties to members immediately
after 1st January in the year in which the shareholder’s membership
terminated. The Company shall give the shareholder confirmation of
the expiry of his share together with the final account.
13.1.6 Forced Termination
The Board of Directors may give any shareholder a written notice
signed by the Chairman of the Board and the General Manager of the
expiration of such shareholder’s share at the end of fourteen days
from the date of notice (hereinafter in this Article: “Notice Period”).
Upon termination of the Notice Period, such member shall be
deemed to have given notice of his intention to resign from the
Company, as prescribed in Article 13.1.2 above, and the provisions
of Articles 13.1.3, 13.1.4 and 13.1.5 shall apply, accordingly.
13.1.7 A member who has filed an appeal to the Arbitrator during the notice
period shall remain a shareholder in the Company until confirmation
of the resolution by the Arbitrator.
13.1.8 Causes for Termination of Membership
The Board of Directors may, subject to Articles 63.8 and 63.9,
redeem the share of any shareholder whose address is unknown and
who has not been entitled to royalties for five consecutive years.
13.1.9 The Board of Directors may, in accordance with these Articles,
redeem any Participation Share or any Royalty Share if the holder
thereof was not entitled to any royalties from the Company for 10
consecutive years.
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13.1.10 The Board of Directors may redeem, in accordance with these
Articles, the share of any publisher who has ceased publishing
activities or has assigned all copyrights in his ownership or copyrights
he represented to another, or who has given the Company notice
under Article 10.1 above, unless such activity has been renewed
within two years of the time it ceased.
13.2 Additional Rights and Obligations
No provision herein shall restrict or preclude a shareholder from his right
to administer his rights as he sees fit in any work not assigned to the
Company under a deed of assignment, or in any work which the member
was not required to assign under the provisions of these Articles.
13.3 A shareholder shall take no legal measures regarding any right assigned
to the Company under a deed of assignment, in the event of breach of
such right, unless the Company’s Board of Directors has approved such
action.
13.4 A shareholder shall take no action which can harm the Company; a
shareholder shall cooperate with the Company, its clerks and directors in
order to ensure the fulfillment of these Articles and/or rules of procedure
under Article 33.3 in order to promote the Company’s business, and shall
provide reasonable assistance to the Company, its clerks and directors,
towards the achievement of this goal.
13.5 In the event that a shareholder acts in breach of the provisions of a
deed of assignment, the Board of Directors may reduce his royalties by a
rate of up to forty percent of his latest annual income from the Company.
13.6 Without derogating from the provisions of Article 10.7, the Board of
Directors may take measures against any shareholder who has done any
act contrary to these Articles, including a disciplinary rebuke, warning,
conversion of a higher class of share to a lower class, and may order
26
such shareholder to indemnify the Company for all the damage caused to
the Company as a result of such actions.
13.7 The Board of Directors shall not exercise its power under Articles 13.5
and 13.6 above until such shareholder has been summoned to a meeting
of the Board of Directors in which his case is dealt with. If the
shareholder does not appear at the Board's meeting, having been
summoned, and did not present a reasonable excuse for his absence,
the Board may decide in the matter in his absence.
13.8 A special majority of the Board of Directors must vote in favor of any
decision exercising the power under this Article. A shareholder may
appeal a resolution of the board before the arbitrator within 14 days from
the date he becomes informed of the resolution of the board.
13.9 Transitory Provision
Shareholders registered in the Company on December 30, 1958 are eligible
for an ordinary share.
Shareholders registered in the Company on December 31, 1980 are eligible
for a share according to their status on that date, and subject to the
provisions of these Articles.
14. Issue of Other Shares and Securities
Public Issue
14.1 The Company shall not offer securities or bonds to the public.
14.2 The Company’s Board of Directors may issue Company shares up to the
number of registered Company shares.
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14.3 Subject to the provisions of these Articles, the Board of Directors may allot
shares to such persons and of such class and under such conditions as it
sees fit.
14.4 The Company’s existing shareholders shall not have any precedence,
preference or any other rights to purchase Company securities. The Board
of Directors may, at its exclusive discretion, offer Company securities first
to all or some of its existing shareholders.
15. Calls for Payment
15.1 Upon the Company’s allotment of shares, shareholders shall pay the
Company the sum of one (1) NIS for the share’s par value.
15.2 Shareholders shall not be entitled to dividends or shareholders’ rights
unless they have paid all amounts set out in the calls for payment issued to
such member, plus interest, linkage and expenses, if any, unless the Board
of Directors has otherwise directed.
15.3 The Board of Directors may sell, re-allot or otherwise transfer any share
forfeited in any manner resolved, with or without charge paid up or deemed
paid up for the share.
15.4 The Board of Directors may revoke forfeiture at any time before the sale or
any form of transfer of the forfeited share, under such conditions as it
resolves. Any shareholder whose shares have been forfeited must pay the
Company all calls for payment with regard to these shares not yet paid up
before the forfeiture, notwithstanding the forfeiture, in the same manner as
if the shares had not been forfeited, and must fulfill all other demands and
requirements the Company had the right to enforce with regard to the
shares up to the date of forfeiture, without deduction or reduction for the
value of the shares on the date of forfeiture. The shareholder's obligations
shall be fulfilled only after the Company receives full payment as
prescribed at the time of share issue.
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15.5 The Board of Directors may collect calls for payment not paid up for all or
some shares forfeited, as it sees fit, but shall not be obligated to do so.
15.6 Forfeiture of a share shall cause revocation of all rights in the Company at
the time of forfeiture and any demands or claims towards the Company
with regard to the share, save those rights and duties excluded under
these Articles or granted or imposed by law to or on a former shareholder.
16. Company Shareholder Register and Issue of Share Certificates
16.1 The Company shall keep a register of shareholders, managed by the
Company secretary, subject to the supervision of the Board of Directors.
16.2 A shareholder is entitled to receive one or a number of share certificates
regarding all shares of a certain class registered in his name, free of
charge, within two months of allotment or registration of a transfer (unless
the terms of issue prescribe a different time period). Share certificates shall
state the number of shares and the sum paid for such, and any other
particulars deemed important by the Board of Directors. In the event of a
share held jointly, the Company shall not be obligated to issue more than
one share certificate for all the joint holders, and delivery of such certificate
to one of the joint holders shall be deemed delivery to all.
16.3 Every certificate shall bear the signature or seal or printed name of the
Company, and shall bear the signature of one director and of the Company
secretary, or of two directors or of any other person appointed by the Board
of Directors for this purpose.
16.4 The Company may issue a new certificate in place of a certificate issued
and lost or defaced, with such proof and guarantees as the Company may
demand, subject to payment of a sum prescribed by the Board of Directors.
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16.5 Where two or more persons are registered as the joint holders of a share,
each one may confirm receipt of a dividend or other payments in
connection with that share.
17. Trustee as Shareholder
The Company shall not recognize a trustee as a shareholder, and shall not be
required or obligated to recognize any right based on the rules of equity or any
conditional right, or any future right, or partial right in a share, or any other right
whatsoever with regard to any share, other than the registered owner’s absolute
right in connection with any share, unless a judicial decision or a provision of the
law requires the Company to recognize such right.
18. Transfer of Company Shares
Company shares are not transferable. The Company’s Board of Directors has
the power to approve the transfer of a Company share in special cases and
according to the provisions of these Articles, provided the person receiving the
transfer is entitled under these Articles to a share of the class of the share being
transferred.
18.1 The Company may demand a fee for the registration of a transfer, in such
amount or at such rate as shall be fixed by the Board of Directors from time
to time.
18.2 The Board of Directors may close the share register for a period of up to 30
days each year.
18.3 Upon the death of a Company shareholder, the Company shall recognize
the guardian or administrator of the estate, executor of the deceased's will
and in the absence of such, the legal heirs of the shareholder, as the sole
persons entitled to the inheritance share for the deceased shareholder’s
share, after having proven entitlement to such, as prescribed by the Board
of Directors, all subject to the provisions of article 12 above.
30
18.4 Any person who has acquired the right to shares by virtue of being a
guardian, administrator of the estate, heir of a shareholder, receiver,
liquidator or trustee in bankruptcy of a shareholder, or by virtue of any
other provision of law, may be registered as the shareholder or, subject to
the provisions of these Articles regarding transfer, transfer the share to
another, after providing proof of rights as required by the Board of
Directors.
19. Bearer Share Certificates
The Company shall not issue bearer shares, testifying that the bearer of such
share is the holder of the rights set forth therein.
20. Lien on Shares
20.1 A shareholders may not pledge his share. To remove any doubt, and
without derogating from the aforesaid, the Company shall be entitled to a
first and paramount lien on all shares not paid up in full, which are
registered in the name of any member, and also over the proceeds of sale
thereof to secure payment of amounts (whether or not such payment has
already fallen due) already called or to be called at a fixed time for such
shares. The Company shall also have first charge on all shares (except for
fully paid up shares) registered in the name of any member for securing
payment of money due from such shareholder or from his property,
whether such money is due from him only or together with any other
person.
The foregoing charge shall apply to all dividends declared from time to time
on such shares.
20.2 In order to enforce such charge and lien, the Board of Directors may sell the
shares the subject of the lien, or any part thereof, in such manner as it sees
fit. No share shall be sold unless the time fixed for payment has elapsed and
written notice has been given to the member stating that the Company
31
intends to sell the share, and the money has not been paid within fourteen
days following such notice.
20.3 Net proceeds of any such sale, after payment of the sale, shall be used for
payment of the shareholder’s debts or liabilities, and the balance (if any)
shall be paid to him.
20.4 In the event of a sale following the enforcement of a charge or lien by
assumed exercise of the powers conferred above, the board or directors
may register the purchaser of these shares in the shareholders’ register as
holder of the shares sold, and the purchaser shall not be liable to verify the
validity of such actions or be concerned as to the application of the proceeds
of sale. After the shares are registered in the name of the purchaser, no
person shall have the right to appeal regarding the validity of the sale.
21. Alteration of Share Capital
The General Meeting may resolve to take any of the following actions, provided
the General Meeting’s resolution is passed by a special majority.
The provisions set forth below shall apply with regard to other Company
securities as well, mutatis mutandis.
21.1 Increase of share capital
To Increase the Company’s share capital, whether or not all the shares
registered at such time have been allotted. The increased capital shall be
divided into shares with preferred rights or deferred or other special rights
(subject to special rights of any existing class of shares), or subject to
such conditions and restrictions regarding dividends, return of capital,
voting or other conditions as may be prescribed by the General Meeting
in its resolution for increase of capital, and in the absence of a special
instruction prescribed by the Board of Directors, subject to the provisions
of these Articles.
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21.2 Classes of shares
To divide the Company’s share capital into various classes of shares and
to fix and modify the rights attached to any class of shares, under the
following conditions:
A. So long as not otherwise prescribed by the terms of issue of the
shares, the rights of any class of shares may be modified, following a
resolution of the General Meeting of the shareholders of each class
of shares separately or the consent of all shareholders of each class,
obtained in writing.
B. The rights to which the holders of a certain class of shares are
entitled shall not be deemed modified by the creation or issue of
other shares having identical rights, unless otherwise provided in the
terms of issue of such shares.
21.3 Consolidation of capital
To fix a par value for a share, consolidate and redivide all or part the
share capital into shares of greater value than the existing one. If as a
result of consolidation, fractions of shares remain after consolidation, the
Board of Directors may, by resolution, if approved by the General Meeting
regarding aforesaid consolidation of capital:
A. Sell the total of all fractions, and for this purpose, appoint a trustee in
whose name share certificates shall be issued on the fractions which
will be sold, and the proceeds, after deduction of fees and expenses,
shall be divided among those entitled. The Board of Directors may
decide that the shareholders entitled to proceeds of less than an
amount fixed shall not receive proceeds from the sale of such aforesaid
fractions, and their portion of the proceeds shall be divided among the
shareholders entitled to proceeds exceeding the sum fixed, pro rata to
the proceeds to which they are entitled;
33
B. Allot to each shareholder remaining with fractions of shares after
consolidation a number of shares of the class as they were prior to the
consolidation, paid up in full, in such a number allowing consolidation
of these shares with the remaining fraction to create one full
consolidated share, and such allotment shall be deemed valid
immediately prior to consolidation;
C. Resolve that shareholders remaining with half or less of the number of
shares required for consolidation creating one consolidated share shall
not be entitled to receive a consolidated share for fractions remaining
after consolidation, and shareholders remaining with more than half of
the number of shares required for consolidation creating one
consolidated share shall be entitled to receive a consolidated share for
fractions remaining after consolidation.
Should action under Sub-Articles B or C above require issue of
additional shares, payment shall be made in the same manner as
payment for bonus shares. Such aforesaid consolidation and division
shall not be deemed modification of rights in the shares the subject
matter of the consolidation and division.
21.4 Cancellation of unalloted share capital
Cancel registered share capital not yet allotted, provided the Company
has not undertaken to allot such shares.
21.5 Division of share capital
Divide all or part of the Company’s share capital into shares of a smaller
nominal value than that fixed, by division of all or some Company shares
at the time being.
Chapter Three – General Meeting
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22. Powers of the General Meeting
22.1 Subjects within the power of the General Meeting
Company resolutions on these subjects shall be taken by the General
Meeting:
A. Modifications of the Articles: no General Meeting of the Company
shall deal with an amendment or cancellation of any Article under
these presents, nor shall it amend or cancel such an Article more
than once during a period of twelve months.
The above limitation shall not apply to any amendment or cancellation
proposed by the Board of Directors.
B. Exercising powers given to the Board of Directors, provided the
General Meeting has found that the Board of Directors is unable to
exercise its powers, and that exercise of the powers is critical for
proper management of the Company.
C. Appointment or renewal of the appointment or termination or non-
renewal of the appointment of the Company's auditor, under Articles
23.1(B)(2) and 54 below.
D. Appointment of directors, under Articles 34, 35 below.
E. Approval of actions and transactions with interested parties, and
approval of an action or transaction with an interested party
constituting breach of fiduciary duty on the part of an officer, subject
to the provisions of section 225 of the Companies Act.
F. Alterations in the Company’s share capital, in accordance with the
provisions of Article 21 above.
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22.1A In General Meetings of the Company, only shareholders themselves may
participate.
22.2 General Meeting’s power to transfer powers between organs of the Company
The General Meeting may, by a vote passed by simple majority, take upon itself
powers given to another organ of the Company. The General Meeting may also
transfer powers of the General Manager to the Board of Directors.
Taking or transferring powers as stated shall be for specific issues or limited
periods of time, all as stated in the General Meeting’s resolution.
23. Annual, Extraordinary and Class General Meetings
23.1 Annual General Meetings
An Annual General Meeting shall take place at least once every year, no
later than 15 months after the last Annual General Meeting. The meeting
shall take place at the Company’s registered offices, unless otherwise
prescribed by the Board of Directors.
If no such aforesaid meeting has been convened, it must be held at the time
and place the Board of Directors prescribes. If no Annual General Meeting
was convened as stated, an Annual General Meeting shall be held in the
month following. If the Board of Directors does not convene the Annual
General Meeting as stated, any sixty holders of ordinary shares may
convene the Annual General Meeting according to the provisions of this
Article, mutatis mutandis.
Such Annual General Meetings shall be termed "annual meetings", and any
other General Meetings shall be termed extraordinary General Meetings.
A. The Annual General Meeting shall convene for presentation of the
following reports:
(1) Submission of the financial statements and the directors’ report,
submitted by the Company under the Securities Regulations as of
36
December 31 of the calendar year preceding the year during which the
annual meeting is convened.
(2) Submission of a report from the Board of Directors regarding the
remuneration of the auditor, and renewal of his office, giving particulars
of his professional background.
(3) Submission of the report of the Inspection Committee, as provided for
in Article 50.14.
B. The annual meeting shall be convened for resolving the following
matters:
(1) Appointment of directors and termination of their office, in accordance
with the Article below.
(2) Appointment or renewal of appointment of an auditor, and authorization
of the Board of Directors to fix the auditor’s remuneration, subject to the
provisions of Article 54.4 below.
23.2 Extraordinary General Meetings
An Extraordinary General Meeting shall deliberate and decide all matters which
may not be deliberated and decided at an Annual General Meeting and for which
the Extraordinary General Meeting was called.
24. Convening General Meetings
24.1 Convening annual meetings
The Board of Directors shall convene annual meetings in accordance with
the provisions of Article 23.1 above.
24.2 Convening extraordinary meetings
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The Board of Directors may decide to convene an extraordinary meeting.
24.3 The Board of Directors shall be bound to convene an Extraordinary
General Meeting on the demand of either:
A. One director.
B. 10% of the holders of the ordinary shares of the Company.
If the Board of Directors has not convened an extraordinary meeting as
stated in this Article, the party demanding such meeting – and if it be
shareholders, half of their number - may also convene a meeting
themselves, provided that it not be convened later than three months after
the date on which such demand was submitted, and must be convened,
so far as possible in the same manner as a meeting convened by the
Board of Directors.
If an Extraordinary General Meeting has been convened as stated, the
Company shall cover the reasonable costs incurred by the demanding
party.
No General Meeting shall be convened for deliberating one subject more
than once during a period of 12 months.
The Board of Directors shall be entitled to refuse to convene an
Extraordinary General Meeting under the demand of shareholders or a
director if the demand for such convening is contrary to the provisions of
this passage.
If there is a dispute between the Board of Directors and the demanding
shareholders or director whether the subject for the Extraordinary Meeting
is the same subject already decided during the period of 12 months or
not, the matter shall be brought to the Arbitrator and his decision shall be
final.
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The limitation provided for in this passage shall not apply to the
convening of an Extraordinary General Meeting by the Board of Directors.
24.4 A notice for convening an Annual General Meeting or an Extraordinary
General Meeting shall be given no more than 45 days and no less than 7
days prior to the date of the meeting. The day of sending the notices shall
not be counted. The notice shall set out the place of the meeting, the date
and the hour on which it will take place and the agenda for the meeting.
Notice shall be served on all shareholders who are entitled to receive such
notice from the Company. Accidental non-service of the notice to, or non-
receipt of the aforesaid notice by, any shareholder shall not invalidate the
meeting.
24.5 The Board of Directors shall appoint the time of an Extraordinary General
Meeting under demand within 21 days from the date on which the demand
was submitted and the notice of convening this meeting shall be given in
accordance with Article 24.4.
24.6 Deleted
24.7 Content of notice
Notice of a General Meeting shall include the place and time of the
meeting, and details of the subjects on the agenda. If any proposal for
modification of the Articles is on the agenda, the draft proposed
modification shall be included in the notice.
No Company financial statements shall be attached to the notice,
however, such statements may be examined at the Company’s
registered office during the 7 days preceding the annual meeting, during
normal working hours, or at such place and at such time as noted in the
notice.
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25. Agenda at the General Meeting
25.1 The agenda of General Meeting, Annual or Extraordinary, shall be set by
the Board of Directors, and shall include also the issues in the demand for
an extraordinary meeting.
25.2 One or more shareholders may demand that the Board of Directors include
an issue on the agenda of a General Meeting to be convened in the future.
The Board of Directors shall include such an issue on the agenda, at their
discretion, provided that such issue is, at the discretion of the Board,
appropriate for dealing with at the Company’s General Meeting.
If at least 30 days before the date of convening of the meeting, 30 or more
shareholders have demanded that the Board of Directors include an issue on
the agenda of a General Meeting, the Board of Directors must include the
issue on the meeting’s agenda.
25.3 Only issues appearing on the agenda shall be resolved at the General
Meeting.
25.4 So long as not otherwise prescribed by law, the General Meeting may pass
or reject a proposed resolution on the agenda of a General Meeting, drafted
or described in brief and notified by the Company, with slight modifications,
however, the meeting may not pass a resolution substantially different from
the resolution proposed.
26. Deliberations at General Meetings
26.1 Holding a meeting through means of communication
The Company may hold a General Meeting using any means of
communication, allowing all participating shareholders to hear each other
simultaneously.
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26.2 No business at a General Meeting may be commenced unless a quorum
is present at the time of deliberations. 40 holders of ordinary shares
present in person shall constitute a quorum.
26.3 If half an hour after the time fixed for a meeting, at least 15 holders of
ordinary shares are present, the meeting shall take place. If the above
number of holders of ordinary shares are not present, the meeting shall
be adjourned to a time appointed by the Board of Directors not later than
6 weeks from the original time. At the adjourned meeting, 15 holders of
ordinary shares present shall constitute a quorum.
These provisions shall not apply to a meeting convened by demand,
which meeting shall be cancelled if no quorum is present.
26.4 Chairman of the General Meeting
The Chairman of the Board of Directors, and in his absence, his deputy,
shall open the General Meeting. If there is no chairman or he is not
present 15 minutes after the time fixed for the meeting, the members
present at the meeting shall elect one of the directors present, or if no
director is present at the meeting, shall elect one of the shareholders to
serve as chairman of the meeting. Members shall choose the chairman of
the meeting immediately upon opening the meeting.
26.5 Adjourned meetings
The chairman of a General Meeting may, with the consent of the meeting
at which a quorum is present, and if the meeting so resolves, shall
adjourn it from time to time and from place to place, as the meeting shall
resolve (such meeting is referred to for purposes of this Article as the
“adjourned meeting”). If a meeting is adjourned for fourteen days or
more, notice of the adjourned meeting shall be given in the same manner
as given for the first meeting. Save for the above, no shareholder shall be
entitled to receive notice of adjournment or of the issues to be discussed
41
at the adjourned meeting. No business shall be transacted at the
adjourned meeting other than the business which was on the agenda of
the meeting at which the decision to adjourn was made.
27. Member’s Votes
27.1 Passing a resolution
Any resolution at any General Meeting shall be passed by a show of
hands, unless a secret ballot has been demanded before the vote by a
majority of the owners of ordinary shares present at the meeting. If a
decision for a secret ballot is accepted, the meeting shall be adjourned to
another time set by the Board of Directors for the purpose of holding a
poll.
If no secret ballot has been demanded, a declaration by the chairman
that a resolution was passed or rejected shall serve as irrefutable
evidence of such fact, and a note thereof shall be entered in the
Company's minutes.
Resolutions on the table shall be passed at all General Meetings by
simple majority, or by any other majority specially prescribed by law or
under these Articles.
27.2 If a secret ballot was demanded, the ballot shall be conducted in such
manner and form as the chairman of the meeting directs, and the result
of the secret ballot shall be regarded as a resolution of the meeting at
which the secret ballot was demanded.
27.3 A secret ballot to elect the chairman or to adjourn the meeting shall be
held immediately. If a secret ballot is demanded for any other issue, the
ballot shall take place at such time as the chairman of the meeting
directs.
42
27.4 If the votes are tied, whether in a secret ballot or vote by show of
hands, the chairman of the meeting at which the vote or secret ballot was
held shall have an additional or casting vote.
27.5 Each shareholder entitled to vote shall have one vote, whether in a
secret ballot or by show of hands. A shareholder not present in person at
the meeting shall not be entitled to vote.
27.6 In the event of a secret ballot, the ballot slip must be delivered
personally.
Tallying the majority
A tally of the majority shall be performed by a count of votes, and each
holder of an ordinary share shall be entitled to one vote in respect of each
share held by him at the time of voting, paid up in full or calls of payment in
respect thereof have been fully paid.
27.7 A declaration by the chairman that a resolution has been passed or
rejected unanimously or by a certain majority shall constitute prima facie
evidence of such fact.
27.8 Written resolution
Subject to the provisions of any law, any written resolution, signed by the
holders at the time of passing the resolution of all issued shares, entitling
the holders thereof to participate and vote in the Company’s General
Meeting, or of a certain class of shares the subject of the resolution, as
the case may be, shall be deemed for all intents and purposes a valid
resolution passed at a General Meeting of the Company or of that class
of shares, as the case may be, duly convened for the purpose of passing
such a resolution. Such a resolution may be included in a number of
documents all worded identically, each signed by one or more
shareholders.
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27.9 The determining date for participation and voting
Only holders of ordinary shares registered in the shareholders’ register of
the Company at the time of the meeting shall be eligible to participate
and vote in a General Meeting.
27.10 The right to participate and vote
A shareholder owing the Company payment already called for the shares
held by him shall not be entitled to participate and vote in any General
Meeting or be counted for a quorum, unless the terms of issue of the
shares otherwise prescribe.
27.11 Personal interest in resolutions
A shareholder desiring to vote in respect of a resolution requiring a majority
of one third of the votes of members who have no personal interest in the
issue, shall notify the Company’s registered office, until the date of the
General Meeting, whether or not he has a personal interest in the passing of
the resolution, as a condition for voting and having his vote counted.
27.12 Votes of legally disqualified members
A legally disqualified member may vote only through his trustee or natural
or legal guardian, who shall personally vote.
28. Minutes of the General Meeting
The chairman of the General Meeting shall cause the minutes of each General
Meeting to be duly kept and including:
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(A) The names of members and number of shares held by such.
(B) The main points of the deliberations and resolutions passed or rejected at the
General Meeting, and if passed – by what majority.
Chapter Four – The Board of Directors
Qualification of directors
29. All the provisions in these Articles concerning the qualification of a shareholder to
be elected and to serve as a director shall apply to a substitute director.
29.1 A person who does not hold shares of the Company cannot be elected, nor
can he act as a director.
29.2 A body corporate which holds a share in the Company shall not be elected,
nor shall it serve as a director, however a person who controls such body
corporate or acts as an officer therein may be elected and serve as a director,
as long as he controls the body corporate or acts as an officer therein.
If the person serving as a director on behalf the body corporate ceases to be
a director for any reason (hereinafter: "the former director"), he shall be replaced
by the person who received the largest number of votes after the former director in
the sector in which the former director was elected.
If the person who was elected as a director on behalf of a body corporate
ceases to control the body corporate or to be an officer therein, but controls
another body corporate which is a shareholder in the Company or acts as an
officer therein, the person shall remain a director.
29.3 A member of the Board of Directors cannot serve in any other capacity in the
Company, and cannot serve as an officer or in any other capacity in any
company that provides services to the Company.
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29.4 An officer or member of the Board of Directors of a society for collective
administration of copyright or performance rights (“Another Society”) may not
be elected as a director of the Company and may not serve as a director in the
Company. If any person serving as a director in the Company is elected to
such aforesaid office in Another Society – he shall cease to serve as a director
immediately upon his being so elected.
29.5 No person who was convicted of a criminal offence in a final judgment shall
be elected or serve as a director, unless the limitation period as defined in
the Criminal Registration Act 1981 has elapsed.
29.6 A person who has excluded rights or works from the Company's repertoire
shall not be elected, nor serve as a director in the Company.
29A. Non-executive directors
29A.1 At least a third of the members of the board of directors of the
Company shall be non-executive directors under such meaning in Part 5 of the
First Chapter in the Sixth Section of the Companies Law, 5759 – 1999 and the
provisions of this part shall apply, mutatis mutandis, on the Company.
29A.2 Revoked.
29A.3 Revoked.
29A.4 Revoked.
29A.5 Revoked.
29A.6 Revoked.
29A.7 The Board of Directors shall recommend to the General Meeting on
the appointment of non-executive directors so that the number of the
non-executive directors shall not be less than a third of the members of
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the board, and will present their resumes and professional
qualifications to the meeting.
29A.8 Notwithstanding any provision in these Articles, the non-executive
directors shall be appointed by the General Meeting by a simple
majority of the holders of the ordinary shares present at the meeting by
a show of hands. In case of deadlock, a further vote shall take place
during the same meeting. If the General Meeting did not appoint two
candidates or one of them, the Board of Directors shall bring to the
next General Meeting another candidate or other candidates.
30. Composition of Board of Directors
30.1 The Company’s Council shall consist of members of the Board of Directors as
stated in Article 30.2 herein below, and seven substitutes of the directors who
are not non-executive directors as provided for in that Article.
30.2 The Board of Directors shall be composed as follows:
(1) two lyricists (2) one writer of serious literature (3) two composers of light
music (4) one composer of serious music (5) one publisher (6) non-executive
directors in a required number so that their number on the board will not be
less than a third of the number of members of the board.
The composition of the Board of Directors may be changed only by a majority
of 75% of the holders of ordinary shares present at a General Meeting.
However changes concerning the non-executive directors may be passed by a
simple majority.
The elected members of the Board of Directors shall have substitutes, i.e. two
lyricists, one writer of serious literature, two composers of light music, one
composer of serious music and one publisher.
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If the office of a director is vacated for any reason, it shall be filled by a
substitute from the list of substitutes who has the maximum number of votes in
the same sector whose office was vacated, and shall become a director for all
purposes. If for any reason the substitute cannot fill the position, the board of
directors, in accordance with the provisions of these Articles, shall act to
convene a general meeting of the Company to choose a director from the
sector in which an office of director became vacant, who will serve in the
position until the expiration of the period of service of the board during which
he was elected.
30.3 The number of directors in the Company shall be no less than four directors
who are not non-executive directors and two non-executive directors
(hereinafter: “the Minimum Number”) and shall not exceed eleven, unless
decided otherwise by the general meeting.
If a position of a director becomes vacant, the remaining directors may
continue to act, except in the case where the number of remaining directors
is less than the minimum number.
If the number of the remaining directors is less than the minimum number,
they will be entitled to act only for the election of other directors so as to
reach the minimum number by summoning a General Meeting of the
Company, but not for any other purpose.
30.4 The substitute directors shall not participate in meetings of the Board of
Directors unless they are invited by the Board of Directors.
30.5 The Board of Directors shall invite substitute directors to its meetings at least
once every four months. In such meetings of the Board of Directors, the agenda
shall include at least one of the following:
1. General operations report.
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2. Report of the implementation of the resolutions of the General Meeting
and of the Board of Directors.
3. Budget proposal for the following financial year.
30.6 Substitutes shall not have voting rights in the Board of Directors. However,
they shall be entitled to express their opinions. Resolutions of the Board of
Directors shall be passed by a majority vote.
30.7 Revoked
30.8 A director may be absent from meetings for a period to be approved by the
board. In the event that this period exceeds one month, the board shall invite the
first on the list of substitutes in place of the missing director, in accordance with
the provisions of Article 30.8, to serve as a temporary member for all intents and
purposes until the return of the missing member; however, the board may invite
a substitute within the said period of a month as well.
31. Honorary members of the Board of Directors
31.1 In addition to the members of the Board of Directors and their
substitutes, the General Meeting may also elect an honorary member of
the Board of Directors, with such member’s consent.
31.2 Only a person who served as a director or a substitute director for a
period of 10 years, and is 65 years of age or more, and whose activities
for the good of the Company are worthy, in the opinion of the General
Meeting, of special appreciation may be elected as honorary members of
the Board of Directors.
31.3 An honorary member may participate in meetings of the Council only.
He shall not be entitled to receive any remuneration for his participation
in meetings.
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31.4 The number of honorary members of the board shall not exceed three,
provided each belongs to a different sector (composer, writer, publisher).
32. Officers in the Board of Directors
32.1 The Board of Directors shall elect one of its members to be the
chairman, another to be his deputy, another to be the treasurer and
another to be the secretary thereof. Elections shall take place during the
first meeting of the Board of Directors after the annual meeting at which the
Board was elected, or at any other meeting as it may decide.
32.2 If the Chairman of the Board elected is a writer, his deputy shall be
elected from among the composers, and vice versa.
32.3 If the office of the Chairman of the Board or of the Deputy Chairman of
the Board has been vacated, directors elected by the Board to serve in
such office shall serve until the next elections.
32.4 If the Chairman of the Board is absent from a meeting, the board shall
elect another from among its members to chair the meeting and sign the
minutes thereof, however, such person shall not have an additional vote.
32.5 Powers of the Chairman of the Board of Directors
A. The Chairman of the Board shall chair each meeting of the Board, and
sign the minutes of the meeting.
B. If the votes for any resolution of the board are tied, the Chairman of the
Board shall have an additional vote.
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C. The Chairman of the Board may at any time, of his own initiation or by
resolution of the Board of Directors, demand reports from the
General Manager on matters relating to Company business.
32.6 Restrictions concerning the Chairman’s activities
A. The Chairman of the Board may not serve as General Manager of the
Company, unless he has been appointed in accordance with the
provision of Article 52.2 below.
B. The Chairman of the Board shall not be a member of the Inspection
Committee.
33. Powers of the Board of Directors
33.1 The powers of the board are as set forth by law and in the provisions of these
Articles.
33.2 The business and operations of the Company shall be performed by the board,
which shall be authorized to make all payments deriving from the
establishment and registration of the Company, and may exercise all powers of
the Company which under the Company Articles are not exercised by the
General Meeting. All of the above is subject to the provisions of the Articles
and subject to any provisions resolved upon by the Company in the General
Meeting which may not contradict these Articles. However, no Article passed
by the Company in a General Meeting may cancel any action taken by the
board which would have been valid had such Article not been resolved.
33.3 The board has the power to provide for procedures and to modify such from
time to time, subject to the provisions of these Articles. These procedures shall
be notified to the shareholders of the Company by ordinary mail, and shall be
binding.
33.4 (Cancelled)
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33.5 The General Manager shall prepare the Company budget and present it to the
Board of Directors for its approval.
33.6 Before the Company engages in any contract for provision of goods or services
in an amount exceeding NIS 80,000, the General Manager shall study the bids
of at least three different suppliers, and shall choose the most worthwhile.
33A – The Council
33A1. The Council shall consist of the directors and the substitute directors.
33A2. The Council shall be convened by the Chairman of the Board, at such times
as he may fix.
33A3. The Chairman of the Board shall also serve as the chairman of the Council.
33A4. The Chairman of the Board shall determine the order of the Council’s
deliberations.
34. Election of Directors who are not non-executive directors and Their Period of Office
34.1 Directors shall be elected by the General Meeting once every four years in
accordance with the provisions of Article 35 herein, and shall serve in office
until the end of the General Meeting four years after the meeting in which they
were elected, when a new board is elected, unless an office is vacated earlier
under the provisions of these Articles. This Article will become effective as from
the General Meeting held on 1.7.2011.
34.2
The Directors will assume office 60 days after the date of their election
(hereinafter: “Date of Assuming Office”). From the date of the elections to the
Board of Directors until the Date of Assuming Office, the retiring Directors will
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continue to serve on the Board of Directors. During the 60 days after the date
of their election, the Directors will serve as observers at the meetings of the
Board of Directors. This regulation will take effect immediately and will apply
both to the retiring Board of Directors and the Board of Directors which will be
elected at the General Meeting on 1.7.2011.
34.3 At each annual meeting in which a Board of Directors has to be elected, the
directors elected at a previous annual meeting shall be deemed to have
resigned from office. A resigning director may be re-elected.
34.4 A special General Meeting of the Company may elect, in accordance with the
provisions of article 35 herein, directors for the Company in place of directors
whose office has been terminated and in the event that the number of the
members of the board has fallen below the minimum fixed in these Articles or
by the General Meeting.
34.5 It is understood that the provisions of article 34 shall not apply to non-
executive directors, operations of which will be governed by the provisions of
article 29a.
35. Election proceedings for directors
35.1 Directors shall be elected for a period of four years.
35.2 Elections shall be by ballot, at the time of the General Meeting, as set forth
below.
35.3 The Board of Directors shall be elected by direct, secret, sectorial and
proportional elections. This Article may not be amended except at a General
Meeting by a majority of 75% of the members having voting rights.
35.4 Every holder of an ordinary share may elect and be elected.
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35.5 Every holder of an Ordinary Share may vote in elections according to his
main area of activity (sector). The sectors are as follows: lyricists, writers of
serious literature, composers of light music, composers of serious music,
publishers.
35.6 The Company shall classify each member having voting rights to a sector
according to the following provisions:
A. Upon accepting a person as a holder of an ordinary share in the
Company, such person shall declare the sector to which he belongs;
B. A holder of an Ordinary Share may from time to time by written notice
change the sector to which he belongs. The notice shall be in an
appropriate form available at the Company’s offices and on its
internet site, and shall be delivered to the Company so that it is
received no later than 30 days before the date on which elections are
held.
C. A holder of an Ordinary Share may not belong to more than one sector.
D. If a holder of an Ordinary Share has not declared to which sector he
belongs, the sector shall be determined according to the majority of
works registered in his name in the Company data base. If there is
any doubt or dispute, the issue shall be determined by the Election
Committee, and its decision shall be final and binding.
E. The register of members with voting rights shall contain the name,
surname and sector to which each eligible member belongs, and
shall be open to the candidates for study and duplication, provided it
is used for election purposes only.
35.7 The Election Committee shall send each eligible voter a notice by mail
regarding the date of elections, not later than 60 days before election day.
The notice shall state that elections shall be held by ballot, and shall name
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the date and place elections shall be held. A submission of candidacy form
shall be attached to each notice, and any member eligible to be elected may
submit candidacy using this.
Any member wishing to submit candidacy must present the signatures of
seven members having voting rights, belonging to the candidate’s sector,
supporting his candidacy, as a prerequisite to such member’s candidacy.
Three support signatures suffice for the publishers’ sector.
The candidate or the member having voting rights recommending such
candidate shall send to the Election Committee the Candidacy Submission
Form signed by the candidate and with the supporting signatures. A
declaration given by the candidate, confirming that he does not hold any
position or office with the Company or in any business providing services to
the Company must be attached to the form. The sender may also attach to
the form a short statement presenting the candidate's platform (no more than
100 words). The sender shall ensure that the Candidacy Submission Form
has been received by the Election Committee not later than 45 days before
the date of elections. Any candidacy form not received by the aforesaid date
shall not be considered.
35.8 The Election Committee shall send the names of all candidates to all
members having voting rights, together with the candidates' platforms, not
later than 30 days before the date of elections. These particulars shall
appear on the Company’s internet site on the same day.
35.9 All members having voting rights shall be entitled to vote at the ballot box at
the time of voting. Voting at the ballot box shall be performed separately for
each sector.
35.10 Members having voting rights shall elect their candidates, marking the voting
form in the following manner:
A lyricist shall mark up to four names out of his sector’s candidates; a writer
of serious literature shall mark up to two names out of his sector’s
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candidates; a composer of light music shall mark up to four names out of his
sector’s candidates; a composer of serious music shall mark up to two
names out of his sector’s candidates; a publisher shall mark up to two names
out of his sector’s candidates.
35.11 Candidates shall be present at the polls at the time of voting. A candidate
who in not present without reasonable justification shall be disqualified.
35.12 Upon conclusion of the voting at the polls, the Election Committee shall
count all of the participating qualified votes, and shall ensure that no
member having voting rights voted more than once.
The Election Committee shall decide who was elected to serve as a
member of the Board of Directors, or as a substitute director, according to
the following provisions:
Two directors shall be those who received the largest number of votes in
the lyricist sector, and their substitutes shall be the two having the next
largest number of votes in that sector.
One director shall be the person who received the largest number of votes
in the sector for writers of serious literature, and his substitute shall be the
person having the next largest number of votes in that sector.
Two directors shall be those who received the largest number of votes in
the sector of composers of light music, and their substitutes shall be the
two persons having the next largest number of votes in that sector.
One director shall be the person who received the largest number of votes
in the sector of composers of serious music, and his substitute shall be the
person having the next largest number of votes in that sector.
One director shall be the person who received the largest number of votes
in the publishers’ sector, and his substitute shall be the person having the
next largest number of votes in that sector.
In the event that two candidates from a certain sector receive the same
number of votes and cannot agree which one was elected, the Election
Committee shall decide who was elected by casting lots.
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35.13 In the event that the office of any director or substitute director is vacated,
the candidate with the next largest number of votes in that sector shall
come in place thereof.
35.14 It is understood that the provisions of article 35 shall not apply to non-
executive directors, operations of which will be governed by the provisions
of article 29a.
36. The Election Committee
36.1 The Board of Directors shall appoint an Election Committee not later
than 90 days before the date on which elections for directors are held.
The Committee shall serve until after the elections of the Company’s
Board of Directors. The Committee shall consist of four members who
are:
The Company’s external legal advisor, who shall serve as chairman of
the committee, and three holders of Ordinary Shares in the Company,
who are not members of the Board of Directors or members of any
committee in the Company, and who are not Company employees. One
of these must be a writer, the second a composer, provided at least one
member is from the serious sector and one from the light sector, and the
third, a publisher. Members of the Election Committee shall not be
entitled to submit their candidacy in these elections.
36.2 The Election Committee shall act independently, and shall supervise
the fulfillment of the provisions of these Articles regarding elections. The
Election Committee shall have the power to provide for the identification
of the voters, to issue instructions to ensure proper voting and for the
implementation of these Articles in all matters related to elections. The
Election Committee’s decisions in all matters relating to the outcome of
the elections shall be recorded in the minutes of the General Meeting,
and shall be final.
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Decisions of the Election Committee shall be passed by majority vote,
and in the event of a tie vote, the chairman of the Committee shall have a
casting vote.
37. Termination of a Director’s Office
The office of a member of the Board of Directors shall be terminated in each of the
following cases:
37.1 If he resigns by a written notice signed by his hand and submitted to
the Company office.
37.2 If he be declared bankrupt or has settled with his creditors as part of
bankruptcy proceedings.
37.3 If he be found legally disqualified.
37.4 If he is dismissed by a resolution passed by the Company’s General
Meeting before the end of his term of service.
37.5 If he is convicted of an offence, as stated in section 232 of the
Companies Act.
37.6 If he is dismissed by the Board of Directors, under the provisions of
section 231 of the Companies Act.
37.7 If the director ceases to be a holder of an Ordinary Share in the
Company, or in the event that a director elected as the legal
representative of a limited company or of a business, and the company
or the business cease to be a holder of Ordinary Shares in the Company;
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37.8 If the director is elected as the legal representative of a limited
company or if a business ceases to have the qualifications necessary for
such legal representative, as stated in Article 29.2;
37.9 If a director, whether personally or as the representative of a limited
company or of a business, members of Acum, has any business relations
with one of the Company’s customers or potential customers or an
interest in any contract between the Company and one of its customers,
according to which the Company granted a license to that customer, or if
such director is a member of a body or organization dealing in matters
contrary to the Company’s interests. This Article shall not apply if the
director has declared the nature of his aforesaid relations or interests.
Notwithstanding such aforesaid declaration given by the director,
canceling his disqualification, such director shall not be entitled to vote at
meetings or in votes relating to any such aforesaid matters, and if he has
voted, his vote shall be disqualified, all in accordance with the provisions
of sections 254-257 of the Companies Act. Such director shall also not
be entitled to examine the Company’s documents relating to the
aforesaid matters.
37.10 In addition to the provisions of Article 37.9 above, no director shall be
entitled to participate or be present at a meeting of the Board of Directors
on any issue in which, according to a resolution of the majority of
directors present at that meeting of the Board of Directors, such director
has an interest contrary to the Company’s interest, provided this majority
includes representatives of two sectors at least.
37.11 The General Meeting shall have the power to dismiss members of the
Board of Directors or any of them at any time, and to appoint another or
others in their stead, as stated in Article 34 above.
37.12 A director who wishes temporarily to cease his activity as a member of
the Board of Directors may be replaced by his substitute; however, this
shall be for a period of no more than six months. The director who was
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replaced may return to serve as a director, if he so desires.
In the event a director ceases his activities as a member of the Board of
Directors for more than six months he will be considered to have
resigned his directorship.
37.13 Any director who is absent for three consecutive meetings without, in
the opinion of the Board of Directors, a reasonable cause, and without advance
permission from the Board of Directors, may, at the Board's discretion, be
deemed to have resigned from the Board of Directors, if a resolution to that
effect is approved with at least five elected members of the Board of Directors
voting in favour.
37.14 (Cancelled)
37.15 Remuneration for members of the Board of Directors
Members of the Board of Directors shall not receive any remuneration
from Company funds, unless the General Meeting has so resolved, and
in such amount as may be determined by the General Meeting, subject to
the provisions of law.
Remuneration of members of the Board of Directors may be fixed as an
overall sum or as payment for participation in meetings or any
combination of such.
The Company may, by resolution of the Board of Directors, refund
reasonable expenses to a director for performance of his duties, provided
the Board of Directors approves such expenses in advance.
37.16 It is understood that the provisions of article 37 shall not apply to non-
executive directors, operations of which shall be governed by the
provisions of article 29a.
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38. Proceedings of the Directors
38.1 The Board of Directors may regulate the convening and adjournment of its
meetings as it deems fit. Subject to the provisions of these Articles
prescribing a different majority for certain decisions, decisions of the Board
of Directors shall be passed by a majority of votes, and if votes are tied, the
chairman shall have an additional vote.
38.2 Absence of directors shall not disqualify the remaining directors’ power to
act, subject to the provisions of Article 30.3
38.3 The chairman, and in his absence, the deputy chairman, shall serve as
chairman at all meetings of the Board of Directors. If the chairman and the
deputy chairman are not present 15 minutes after the time fixed for the
meeting, the members of the Board of Directors present at the meeting
shall elect one of their number to act as chairman of the meeting. Such an
elected chairman shall not have a casting vote.
39 Convening a meeting of the Board of Directors
39.1 The Chairman of the Board of Directors may convene the Board of Directors
at any time.
39.2 The Chairman of the Board of Directors shall convene the Board of Directors
at least 4 times a year, in a manner allowing the Company to comply with
the provisions of the law concerning publication of financial statements and
reporting to the public.
39.3 The Chairman of the Board of Directors shall convene the Board of Directors
and shall hold a meeting of the Board of Directors on issues set forth, at
the demand of at least two directors or at the demand of one director, if the
Company has less than 5 directors serving.
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39.4 The Chairman of the Board of Directors shall act without delay to convene a
meeting of the Board of Directors within 14 days of the date on which a
director of the Company informed the chairman of an issue discovered to
seemingly be contrary to law or against proper business practices, or from
the day on which the Company auditor has given notice of substantial
defects in the Company’s accounting audit.
39.5 If any action or report on the part of the General Manager requires action on
the part of the Board of Directors, the Chairman of the Board of Directors
shall immediately convene a meeting of the Board of Directors within 14
days of the date of such notice or report.
40 Summoning a meeting of the Board of Directors
40.1 Any notice of a meeting of the Board of Directors may be given verbally
or in writing, provided notice is given at least two business days before the
date set for the meeting, unless all members of the Board of Directors or
their substitutes (depending on who was invited) have agreed to a shorter
time period.
40.2 Notice as aforesaid shall be given in writing or via facsimile or by
electronic mail or through other communication, all to the address or
facsimile number of e-mail address the director has provided the secretary
of the Company upon appointment, or by written notice given to the
secretary at a later time.
40.3 Notice as said shall be given verbally to a director in person or by
telephone notice to the telephone number the director has provided the
secretary of the Company upon appointment, or by written notice given to
the secretary at a later time.
40.4 Notice provided or sent as stated above shall be deemed to have been
delivered to the director personally on the date of delivery or transmission,
as stated.
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40.5 If a substitute has been appointed, notice shall be given to the
substitute unless the director has notified that he wishes to receive the
notice as well.
40.6 Notice of convening a meeting shall state the place and time of the
meeting of the Board of Directors, arrangements for meeting procedure (if
media is to be used) and details of the issues on the agenda, as well as
any additional material as the chairman has asked to attach to the notice.
40.7 The provisions of this Article shall apply, mutatis mutandis, to cases
where substitutes are invited to meetings of the Board of Directors.
41 Agenda for meetings of the Board of Directors
The agenda for meetings of the Board of Directors shall be fixed by the Chairman of
the Board of Directors, and shall include the following subjects:
A. Issues set by the Chairman of the Board of Directors.
B. Issues for which the meeting was called, as stated in Article 39 above.
C. Any issue a director or the General Manager has asked the Chairman of the
Board of Directors to include on the agenda a reasonable time before the
convening of the meeting.
42 Quorum for meetings of the Board of Directors
The quorum for meetings of the board of directors shall be six (6) directors.
42.1 A Meeting via means of communication
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The Board of Directors may hold a meeting using any means of
communication, provided that all the participating directors can
hear each other simultaneously.
42.2 Voting at a meeting of the Board of Directors
Questions arising at meetings of the Board of Directors shall be
resolved by a majority of votes of the directors (or participants, in
the case of a vote via means of communication) present and
voting, unless otherwise stipulated in these Articles.
42.3 Written resolution
A resolution in writing, signed by all directors, shall be deemed a
resolution duly passed at a meeting of the Board of Directors. Such
resolution may contain a number of documents identically worded, each
signed by one or a number of directors.
Such a resolution may be passed by the signature of some of the
directors, if the directors who have not signed the resolution were not
entitled to participate in the deliberations and in the vote on the issue of
this resolution under the law, provided they confirmed in writing that they
were aware of the intention of passing such resolution.
42.4 Resolution confirmed via means of communication
A resolution confirmed by the directors via means of communication shall
be deemed a resolution duly passed at a meeting of the Board of
Directors, and the provisions of Article 42.2 above shall apply.
Such a resolution may be passed by confirmation that was given by
means of communication by some of the directors, if the directors who
have not confirmed the resolution were not entitled to participate in the
deliberations and in the vote on the issue of this resolution under the law,
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provided they confirmed in writing that they were aware of the intention of
passing such resolution.
42.5 Effect of Actions of Board of Directors
All actions taken in good faith at meetings of the Board of Directors, or by
a committee of the Board of Directors, or by any person acting as a
director, shall be valid, even it is later discovered that there was a defect
in the appointment of a director or any such person so acting, or that they
or one of them were disqualified, just as if such person were duly
appointed and was qualified to serve as a director.
43 Company Rights of Signature and Power of Attorney On Its Behalf
43.1 The Board of Directors shall prescribe the rights of signature on behalf of the
Company for various issues. The signature of any person appointed by the
Board of Directors from time to time, in general or for a special purpose,
whether alone or with others, together with the seal or stamp of the
Company, or its printed name, shall bind the Company, under the conditions
prescribed by the Board of Directors.
43.2 The Board of Directors may prescribe different rights of signature regarding
different Company issues and regarding the different amounts of money in
respect of which such persons are authorized to sign.
43.3 The Board of Directors may from time to time empower any person to serve
as the Company’s representative for such purposes and with such authorities
and conditions and for such period as it sees fit. The Board of Directors may
also grant any such representative the power to transfer all or any part of the
powers, authorities and discretion given him.
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44 Directors’ Powers with regard to expenses
44.1 No expenses shall be incurred unless they are included in a detailed
expense budget, approved by the Council as prescribed in these Articles.
44.2 The Board of Directors may approve an unexpected expense not included in
the said budget.
45 Support Fund
45.1 The Board of Directors may, before distributing royalties among the
shareholders, deduct amounts it deems fit, or regarding which it has been
agreed shall be donated to a charitable or similar fund, established for the
benefit of the shareholders, past Company employees, their wives, widows,
families or other such dependants.
45.2 The Board of Directors may set aside amounts it deems fit from proceeds, for
the purpose of establishing a reserve fund for any event, or for future
distribution, or for repair and improvements in maintenance of Company
property or premises and for any other purpose, which at the Board of
Directors’ complete discretion seems necessary or beneficial for the good of
the Company. The Board of Directors is also authorized to invest funds so
set aside in investments which it deems appropriate, and to exchange or
modify such investments from time to time and to use all or any part of such
for the good of the Company; the Board of Directors shall also be authorized
to divide the reserve fund into special funds as it deems fit, and to use the
reserve fund, or part thereof, for the Company’s general use, without being
required to maintain the aforesaid fund separately from other assets.
45.3 Subject to the provisions of these Articles, the Board of Directors must pay
the Company’s expenses and obligations deriving from the exercise and
enforcement of shareholders’ rights, assigned to the Company under these
Articles; such payment shall be made out of the money received by the
Company from administering and enforcing these rights.
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45.4 The Board of Directors may from time to time receive a sum or sums of
money as it deems required for any necessary purpose for the benefit of the
Company. Receipt of such sums shall be performed by the creation and
issue of bonds or shares, creating attachments on the property and assets of
the Company or any part thereof, or by the creation of other securities on
such aforesaid property and assets. The Board of Directors does not,
however, have the power to pledge the rights or interests of any shareholder
assigned to the Company in any shareholder’s works.
46 Minutes of the Board of Directors
The Chairman of the Board of Directors shall ensure that minutes are duly kept and
shall include:
A. The names of directors present at any meeting.
B. The decisions and a summary of the deliberations of the aforesaid meetings.
All such minutes of a meeting of the Board of Directors signed by the chairman of
such meeting or by the chairman of the subsequent meeting, shall be admitted as
prima facie evidence of the matters contained therein.
47 Company’s Registered Office
The Board of Directors shall decide on the location of the Company’s registered
office.
48 Board of Directors’ Committees
The provisions concerning the meetings of the Board of Directors shall apply
mutatis mutandis to the meetings of any committee of the Board of Directors,
unless no other provisions in this respect were made by the Board of Directors,
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and provided always that the quorum for any such Committee shall be two
members thereof.
49 Additional Committees
49.1 The Board of Directors may establish Board Committees. When establishing
such a Committee, the Board of Directors shall decide whether powers of the
Board of Directors shall be delegated to such a Committee or if it be a
consultative committee.
49.2 Only members of the Board of Directors may serve on a Committee to which
powers of the Board of Directors have been delegated. However the
Committee may decide to invite other members who are not directors to join
the Committee, provided that such members shall have no voting right.
49.3 A consultative committee may consist of persons who are not members of
the Board of Directors.
49.4 A decision passed or an action done in a Board Committee, under a power
delegated thereto by the Board of Directors, shall be as valid as a decision or
action passed or done by the Board of Directors.
49.5 A Board Committee shall report regularly to the Board of Directors on its
decisions or recommendations.
49.6 Minutes of a meeting of a Board Committee shall be prepared and sent to
all the members of the Board of Directors. The Minutes shall be kept in
accordance with the provisions of Section 108 of the Companies Act.
49.7 Any director may appeal a decision of a Board Committee within 30 days
from the date on which he received the Minutes including the decision. If an
appeal is filed, the Board of Directors shall decide and its decision shall be
final.
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50 Inspection Committee
50.1 The Board of Directors shall appoint, within 60 days from its election,
an Inspection Committee. The Inspection Committee shall consist of an
internal auditor, who shall be recommended by the Institute of Internal
Auditors in Israel, one non-executive director, one elected director and
one holder of an ordinary share, who are not clients of the Company,
suppliers thereof and who have no conflict of interest with the Company.
50.2 The members of the Inspection Committee shall serve in their positions
until the end of the term of office of the Board of Directors which
appointed them, unless a position is vacated before this time under the
provisions of these Articles.
50.3 No person shall serve as a member of the Inspection Committee for
more than two consecutive terms.
50.4 In the absence of any member of the Inspection Committee, his
substitute will attend in his place.
50.5 The Inspection Committee shall prepare a quarterly report to be
submitted to the Board of Directors. The Board of Directors shall
respond, and in the annual report to the General Meeting, the Board of
Directors shall present both the committee’s report as well as its
responses.
50.6 This Article will be effective as from the date of its confirmation by a
General Meeting. The then currently serving Inspection Committee will
immediately cease to serve.
50.7 A member of the Inspection Committee absent from three consecutive
meetings shall be deemed to have resigned.
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50.8 A quorum for a meeting of the Inspection Committee shall be four
members present. If a member is absent from the Inspection Committee,
his absence and the reason therefor shall be recorded in the Minutes.
50.9 The Committee shall hold its meeting and it shall be deemed to be duly
held if the absent member adds his signature to the minutes within one
month. Notwithstanding the missing member’s signature, his absence
shall be deemed an absence under Article 50.7 above.
50.10 The provisions of Articles 37.9 and 37.10 of these Articles shall apply
to members appointed to the Committee.
50.11 The Inspection Committee shall have full power to audit all the
Company's operations. The Inspection Committee and/or any of its
members may examine all minutes, files, cards, letters, contracts,
accounts, and any other documents it deems necessary and effective for
the performance of its task (hereinafter: “Right to Examine”), provided
such examination is performed with advance coordination with the
authorized party at Acum.
50.12 The Inspection Committee may, by consultation with the Board of
Directors, be assisted by a professional consultant or consultants for the
performance of its tasks, and it may delegate the Right to Examine to
such a consultant or consultants. The Inspection Committee and/or any
of its members may receive information from the Chairman of the Board
of Directors, from the General Manager and from the persons in charge
of the various departments. All of the above are obligated to cooperate
with the Committee and with any member of the Committee in the
fulfillment of their tasks.
50.13 The Inspection Committee may meet with the Board of Directors for
clarifications, provided the Board of Directors receive advance notice (no
less than two weeks) regarding the issues on the agenda for clarification.
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The Board of Directors may also invite the Inspection Committee for
clarifications after similar notice is given.
50.14 The Inspection Committee shall submit its comments in writing to the
Board of Directors, whenever it feels the need to do so. The Committee
shall submit the final report to the annual General Meeting, or to an
extraordinary meeting called under the provisions of these Articles, after
clarifications with the Board of Directors at one of its meetings, at least
two weeks prior to the date of the aforesaid meeting.
50.15 The Chairman of the Board of Directors shall convene the first meeting
of the Inspection Committee no later than 14 days after the Committee is
appointed. The Inspection Committee shall elect a chairman for the
Committee at its first meeting, and shall set the next meeting of the
Inspection Committee. The Inspection Committee shall hold its meetings
as need be and at its discretion. The Inspection Committee shall regulate
its working procedures.
51 Arbitration between shareholders and Directors
51.1 An Arbitrator and his appointment
51.1.1 The Company shall request the President of the Tel Aviv District Court to
appoint a retired Judge who will serve as an arbitrator and shall have the
power to try and decide controversies enumerated in Article 51.2 hereunder
(hereinafter: "the Arbitrator"). In case the President of the Tel Aviv District
Court does not appoint an Arbitrator under the Company's Application, the
Company shall request either Tabernacle Arbitration and Dispute
Resolutionor the Head of the Israel Bar to appoint the Arbitrator.
51.1.2 The Arbitrator shall serve for a period of four years from the date of his
appointment and his term shall automatically be renewed for further periods
of four years each, unless the Company notifies the Arbitrator or the
Arbitrator notifies the Company in writing 120 days prior to the end of the
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original or prolonged term of the termination of the service of the Arbitrator
for any reason whatsoever.
The Arbitrator who is serving the Company on the date of acceptance of this
Article shall be deemed to have commenced his term on the date of the
acceptance of this Article by the Extraordinary General Meeting.
51.1.3 In case the Arbitrator ceases to serve under the provisions of Article 51.1.2
above, or if he is unable to continue his service for any reason whatsoever,
the Company shall again request the appointment of an Arbitrator in
accordance with Article 51.1.1.
51.1.4 A decision concerning the renewal or non-renewal of the service of the
Arbitrator under Article 51.1.2 shall be approved by the Board of Directors in
a session in which at least the 7 elected Members of the Board are present
and at least 5 of them voted for the approval of the decision.
51.2 The Arbitrator's Authority
The Arbitrator shall have the exclusive jurisdiction to try and decide in each
of the following matters:
(a) Any dispute between a shareholder and the Company;
(b) Any dispute between the shareholders themselves which derive from
the mutual relationship thereof in any matter connected with their rights
and obligations towards the Company;
(c) Disputes between the Directors and the Company and between the
Directors themselves which derive from their duty as Directors,
including any matter connected with the termination of the service of a
Director in the Company;
(d) Appeal on any decision of the Election Committee;
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(e) Disputes between the shareholders themselves in the field of copyright
or moral rights connected with works administered by the Company,
including an allegation of plagiarism.
51.3 Procedures before the Arbitrator
51.3.1 The Arbitrator will be subject to substantive law, but will not be subject to
the rules of evidence nor to any procedures.
51.3.2 The Arbitrator will be authorized to grant a declaratory judgment, a
mandatory injunction or a prohibiting injunction, and any other remedy
which the Court is authorized to grant.
51.3.3 Whoever wishes to approach the Arbitrator or the Arbitration Committee will
submit his claim to the Company Secretary. With the submission of the
claim, the claimant will pay a claim fee as follows:
A. In a claim for a fixed sum - a fee in NIS equal to 1.25% of the
amount of the claim, but not less than NIS 100. If a procedure of
submission of evidence (proof) is conducted in this case, the claimant
will pay no later than 5 days before the date of commencement of the
hearing of the evidence, and as a condition of its taking place, a
further sum in NIS equal to 1.25% of the amount of the claim, but no
less than NIS 100.
B. In the matters specified below, a fixed claim fee of NIS 350 shall be
paid;
B.1 Declaratory order, prohibiting injunction, mandatory
injunction or enforcement order, apart from a claim for
monetary remedy as a result of such an order;
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B.2 The duty to account, apart from a claim for monetary
remedy as a result of producing accounts.
C. The amount of the claim fee will be linked to the Consumer Price
Index and adjusted annually.
D. If the claimant so requests, the Arbitrator and/or the Arbitration
Committee, is entitled, at his/its discretion, if it is proven to the
Arbitrator, and/or the Arbitration Committee, that the claimant is in a
state of considerable economic hardship, which prevents him from
paying the said claim fee, to exempt the claimant from payment of the
claim fee.
E. With the submission of the claim, the Company Secretary shall open
a file, number it and transfer it to the Arbitrator or the Arbitration
Committee and to the Defendant. The claim will be sent to the
Defendant together with a registered letter, with "proof of delivery",
signed by the Company Secretary, informing the Defendant that a
claim has been brought against him and that he must submit a
statement of defense within 30 days of receipt of the claim. The letter
will include a notice to the Defendant that if he does not submit a
statement of defense within the said period, the Arbitrator or the
Arbitration Committee will be authorized and entitled to hear the claim
in his absence.
F. When awarding costs in the case, the Arbitrator or the Arbitration
Committee (as the case may be) may use his/its discretion as to
whether or not to take into account the amount of the claim fee paid
by the Plaintiff in the case.
G. Furthermore, in claims which are conducted between ACUM
members, the Arbitrator or the Arbitration Committee as the case
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may be will have the authority to award costs in favor of ACUM,
taking into account the costs incurred by ACUM in connection with
the arbitration proceedings.
H. If the hearing of the claim ends after the first arbitration meeting (even
if it was only a preliminary meeting), the claim fee paid by the Plaintiff
will be returned in full.
51.3.4 According to the Defendant's request, the Arbitrator is authorized to extend
the term in which to submit the Statement of Defense, provided that the
extension will not exceed 30 days and the decision regarding the
extension will be recorded in the protocol of the claim file.
51.3.5 The decision of the Arbitrator will be given within 3 months of the date he
commenced hearing the case, but the Arbitrator is allowed to extend the
term from time to time, as he deems necessary for special reasons which
will be recorded.
51.3.6 The Arbitrator will be entitled to a professional fee which will be paid by the
Company, as agreed between the Arbitrator and the Company.
51.3.7 If a claim has been filed with the Arbitration Committee and sent to the
Defendant, and the Defendant informed the Company Secretary of his
wish that the claim be heard by the Arbitrator, the Company Secretary will
act in accordance with Article 51.1.3 above, as if the claim was filed with
the Arbitrator from the beginning.
51.3A Notification of the decisions of the Arbitrator/Arbitration Committee
The Board of Directors of ACUM is entitled to notify ACUM Members of the
Arbitrator’s decision and the decisions of the Arbitration Committee (as
defined in Regulation 51A below)
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Notwithstanding the aforesaid, at the request of any of the parties to the
arbitration, the Arbitrator, or the Arbitration Committee (as the case may be) is
entitled to prohibit notification of a decision (or any part of it), for reasons to
be recorded, in the event that the decision involves a matter regarding the
personal life of the Plaintiff, including his past sexual life or his state of health,
or his behavior in private, or in the event the Arbitrator or the Arbitration
Committee (as the case ,may be) believed that modification of the decision
would be an inappropriate disclosure of the private affairs of the Plaintiff. In
this regard, any of the matters enumerated in Regulations 51.2 and 51.11A
(including their sub-provisions), as such, shall not be considered as a “private
matter” of the Plaintiff.
51.4 Arbitration Agreement
This Article constitutes a binding Arbitration Agreement between all the parties
mentioned in Article 51.2, amongst themselves, with regard to the matters
mentioned in the said Article.
51a. Arbitration and Appeals Committee
51A.1
An Arbitration and Appeals Committee (hereinafter: "the Committee") shall be
elected once every four years in a General Meeting in which a new Board of
Directors is elected. The procedure for election of the Committee shall be
identical mutatis mutandis with the procedure for the election of the Board of
Directors.
51A.2 The Committee shall consist of shareholders of 3 secotrs, a writer, a
composer and a publisher. Each of the Committee members shall have a
substitute from the same sector as the member.
51A.3 The Members of the Committee shall be elected by the General Meeting out of
a list of candidates who submitted their candidacy. A candidate to the
Committee shall have to submit, as a condition for the candidacy, consent
signatures of 7 shareholders having the right to vote, not necessarily of the
same sector as the candidate, for the candidacy of the candidate.
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51A.4 A Committee member shall serve four years and he may be elected for one
further period of four years only. A Committee member who served two
consecutive periods and was not a member for a period of four years at the
end of the above two periods, may be elected again as a member for no more
than two consecutive periods of four years each.
51A.5 In case for any reason any of the Committee Members shall be unable to
serve on the Committee or resigns from the Committee, the Chairman of the
Board of Directors shall be entitled to summon the substitute for the above
Member to serve on the Committee. If for any reason the above Member
does not have a substitute, the Chairman of the Board of Directors may at his
discretion summon a substitute from another sector.
51A.6 The Committee shall elect its chairman. For this purpose, the Chairman of the
Board of Directors shall summon the members of the Committee not later than
14 days after its election.
51A.7 A quorum in the Committee shall consist of three members present at the
meeting or a delayed meeting. The chairman of the Committee shall conduct
its meetings.
51A.8 The decisions of the Committee shall be passed by a simple majority. In case
of a deadlock, the chairman shall have a casting vote.
51A.9 A Member of the Committee shall not participate in a meeting of the
Committee in which a matter is discussed inwhich the Member has a personal
interest (an Estopped Member). In such a case, the substitute of the
Estopped Member shall participate in the meeting instead of the Estopped
Member. This provision does not prevent the Estopped Member from
participating in the Committee meetings in any other matter.
51A.10 The provisions of Articles 37.9 and 37.10 shall apply mutatis mutandis to the
members of the Committee.
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51A.11 The Committee shall have parallel jurisdiction in the following matters which
are within the jurisdiction of the Arbitrator, if both parties to the dispute agree
that the Committee will have the jurisdiction:
Disputes between shareholders in a matter of copyright or moral rights relating
to works administered by the Company, including an allegation of plagiarism.
Chapter 5 – Company Officers who are not Directors, the Company's Auditor
52 General Manager
52.1 Appointment and Dismissal of General Manager
A. The Board of Directors shall appoint a General Manager, for a
determined or indeterminate period.
The Board of Directors may appoint more than one General Manager.
B. The General Manager need not be a shareholder in the Company.
C. The remuneration and terms of employment of the General Manager
shall be determined by the Board of Directors, in any manner the Board
of Directors deems fit.
D. The Board of Directors may discharge the General Manager from his
position from time to time, or dismiss him and appoint another or others
to serve in his place.
E. A resolution for the appointment or dismissal of a General Manager of
the Company shall be adopted by a special majority of the board of
directors.
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F. A member of the Board of Directors or a substitute director appointed
to serve as a General Manager shall have to resign from the Board of
Directors or from substitution with the Board of Directors, and to act
subject to the provisions of Article 8.16.
G. The General Manager’s role, powers and terms of employment shall be
determined by the Board of Directors, also by a special majority of the
board of directors.
H. Any other senior employee for permanent employment with the
Company may be accepted by decision of the Board of Directors
passed by a simple majority.
52.2 Chairman of the Board of Directors as General Manager
Notwithstanding the provisions of Articles 8.16 and 52.1(F) above, the
Company’s General Meeting may authorize the Chairman of the Board of
Directors to serve as General Manager or to exercise his powers, for a
period not exceeding one calendar year from the date of appointment.
52.3 The Powers of the General Manager and his Subordination to the Board of
Directors
A. The General Manager is responsible for the day to day management of
the Company’s business in accordance with the policies determined by
and subject to the instructions of the Board of Directors.
The General Manager shall have all management and implementation
powers not vested in another organ of the Company by law or by these
Articles, and any other power delegated to him, and he shall be
controlled by the Board of Directors and subject to its instructions.
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The General Manager shall appoint, employ and dismiss Company
officers, excluding directors, and shall determine their terms of
employment unless otherwise prescribed by the Board of Directors.
B. The Board of Directors may instruct the General Manager how to act
in any particular matter; if the General Manager does not act in
accordance with such instruction, the Board of Directors may exercise
the powers required in order to perform such instruction in the General
Manager’s place. The Board of Directors may take upon itself powers
granted to the General Manager for a particular matter or for a
determined period of time.
C. If the General Manager is unable to exercise his powers, the Board of
Directors may exercise such powers in his place, or empower another
to do so.
D. The Board of Directors may empower the General Manager to fulfill all
or some of its powers.
52.4 General Manager’s duty to report
The General Manager has to notify the Chairman of the Board of
Directors of any unusual matter of substantial importance to the
Company or of any substantial deviation on the part of the Company from
policy determined by the Board of Directors. If for any reason the
Company has no Chairman of the Board of Directors, the General
Manager shall make such report to the all members of the Board of
Directors.
The General Manager shall submit reports to the Board of Directors on
issues, at such time and in such scope as determined by the Board of
Directors.
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The General Manager shall report to the Chairman of the Board of
Directors upon demand on issues relating to the Company’s business
and its proper management
52.5 Delegation of the powers of the General Manager
The General Manager may delegate powers to a person subordinate to
him, with the approval of the Board of Directors. However, such
delegation of powers does not release the General Manager from his
responsibility.
53 Secretary and Other Officers in the Company
Secretary
53.1 The Board of Directors may appoint a secretary of the Company, under such
terms as it deems fit, and appoint a deputy secretary, and define their areas
of office and powers, subject to the provisions of Article 32.1.
If no secretary is appointed, the General Manager, or a person authorized by
him, and in the absence of a General Manager, any person so authorized by
the Board of Directors, shall fulfill the duties of the secretary under the law,
these Articles and under the decisions of the Board of Directors.
53.2 The Company secretary shall be responsible for all documents kept at the
Company’s registered office, as stated in Section 124 of the Companies Act,
and shall manage the records kept by the Company under the law.
53.3 Other Company officers
The Board of Directors may resolve that apart from the General Manager
and the secretary, it shall appoint other officers of the Company, whether in
general or in a specific case. In such a case, the Board of Directors shall
appoint the officer, define his duties and powers, and determine his
remuneration and terms of employment.
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54 Company's Auditor
54.1 The annual General Meeting shall appoint an auditor for a period up to the
end of the next annual General Meeting.
54.2 The General Meeting may appoint an auditor for a period not extending
beyond the third annual meeting following the annual meeting at which he
was appointed. In the event the auditor has been appointed for such period,
the annual meeting shall not deal with the appointment of an auditor during
the said period, unless a decision has been made to terminate his office.
54.3 The General Meeting may at any time dismiss the auditor, or not renew his
appointment.
54.4 The Board of Directors shall determine the remuneration of the auditor, and
shall report this to the Company’s annual meeting.
54.5 The Board of Directors shall determine the remuneration of the auditor for
additional services which are not auditing services, and shall report this to
the Company’s annual meeting.
Chapter 6 – Distribution of Royalties
55 Financial Regulations
Licenses, tax invoices and receipts shall be issued by the Company only, and on
the Company’s official forms. They shall contain such terms and provisions
deemed appropriate from time to time.
55.1 Distribution of royalty money and rights
(A) By virtue of the rights assigned to or to be assigned, or which have to
be assigned to the Company under these Articles, the Company shall
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act for the benefit of its shareholders and members of the affiliated
foreign Societies. All monies received or to be received by the
Company shall be divided, budgeted and allocated or administered
subject to and in accordance with these Articles.
(B) All amounts collected by the Company as royalties for the use of works
protected by the Company shall be recorded to the credit of various
accounts, according to the sources of such sums.
(C) After deduction of the Company’s expenses related to the collection
and distribution of these sums, and to the management of the
Company’s business and operations, and after deduction of the
amounts determined by the Board of Directors as contributions and
allowances for any charities, pension or any other fund, the amounts
recorded to the credit of the aforesaid various accounts shall be
distributed among the shareholders, in accordance with the various
accounts and various types of royalties, determined according to the
decisions of the Board of Directors, and according to the various types
of works, their appraisal and distribution of royalties applicable thereto
according to the existing Table or a Table applicable from time to time.
The Board of Directors has the power to decide that in any case where
the cost of deciphering user’s reports and entering them into the Acum
data base is not reasonable in proportion to the royalties to be
distributed for uses set forth in such reports, royalties shall be
distributed according to a sample. The Company shall prepare the
sample, and the Board of Directors must approve it.
The Board of Directors shall establish an appeals committee on the
matter of the sample (hereinafter: the “appeals committee”).
A shareholder who contends that he has been discriminated against in
the distribution of royalties as a result of the use of the sample may
submit an appeal to the appeals committee. The appeals committee,
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after hearing the appellant’s and the Company’s contentions, shall
have the power to hear and decide the appeal. The appeals committee
shall be deemed to be an adjudicator (and not an arbitrator), and its
decision shall be final for all intents and purposes.
(D) Any change in the existing Table, determining the appraisal of a work
by a number of points and the distribution of royalties among persons
who jointly own the rights therein, shall be done only in a meeting of the
Board of Directors, in which all members of the Board of Directors are
present and by a special majority of the board. Any change to the table
related to the rights of the publisher may be made only if the publisher,
a member of the board, is among the members of the board of directors
voting for said change. ,
(E) All amounts received by the Company (save those referred to in Article
55.1(A)), shall be handled and distributed in accordance with Articles
55.1(B) and (C), and subject to such changes as may be required or as
the Board of Directors may instruct from time to time.
(F) Distribution according to the work appraisal Table may be changed by
an agreement between the shareholders, by written notice to the Board
of Directors regarding such agreement, to be signed by the
shareholders affected by the change; provided, however, that the
portion of the author shall be no smaller than 50% (fifty percent) of all
royalties paid for such works.
(G) No shareholder may submit notice to the Company requesting that the
Company pay another person all or part of the amount to which that
shareholder is entitled; however, the Board of Directors may allow
delivery of such notice in writing, at its discretion.
(H) Any amount allocated for distribution, not collected during the three
years following dispatch of notice on the matter to the shareholder’s
last known address, or to any person to whom the member requested
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to send such notice, may be reallocated for distribution. However, the
Board of Directors may transfer such sums to any of the Company’s
funds. Royalties not paid to members due to mistakes on the part of the
Company, which the member, in good faith, failed to demand, shall be
returned to the shareholder upon demand, even if more than three
years have passed from the time of distribution, provided that no more
than seven years have passed since that time.
This Article shall apply only with regard to royalties distributed for the
period beginning on January 1, 1994 onwards. The Board of Directors
may prescribe a minimal sum and any lower amount shall not be
credited to shareholders’ accounts.
(I) Notwithstanding the provisions of Sub-Article (H) above, any amount
allocated for a shareholder who is a publisher, which was not collected
for a period of three years from the time notice was sent in respect
thereof, to the shareholder’s last known address, or to a person to
whom the member requested to send such notice, the Board of
Directors may transfer said sum to the author or authors of the works
for which the amount was allocated.
If the work had more than one author, the aforesaid sum shall be
divided among them according to the Table.
(J) A shareholder who received royalties together with an account of
royalties, and did not give notice that he disagrees with the contents of
the account within 12 months of the date of the account shall be
deemed to have agreed that the account is true and complete, and
shall not have any right to object thereto. All royalty accounts sent to
members shall quote this provision.
(K) The Company shall publish on its internet site information regarding
works in respect of which royalties cannot be paid due to missing
information; such information shall be open for all shareholders to see.
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55.2 Distribution of royalties shall take place at the time or times each year as the
Board of Directors shall decide. All distributions of royalties are final and
binding, unless any shareholder has submitted an appeal within three years
of the date of the appealed distribution.
55.3 Revoked.
55.4 Any income received by the Company from money accumulated and not yet
distributed for various reasons, under Article 55.1 (B), shall be the property of
the shareholders entitled thereto. However, such money shall be paid subject
to a decision by the Board of Directors, in accordance with the provisions of
Article 55.1(C) above.
The Company may invest any such aforesaid money accumulated and not
yet distributed in solid investments in order to maintain the capital and to
guarantee the fruit. The Board of Directors shall determine from time to time
the manner and the period of investment of the money, taking into account
the expected time such money shall be distributed among the members.
56 Acum Member Welfare Fund
56.1 Upon the distribution of royalties as stated in Article 55.1 (C) above, the
Board of Directors may pay, through the Acum Member Welfare Fund, to
needy Acum members (in the case of a deceased member – to the widow or
orphans) a one-time or another payment.
56.2 The money so paid shall be part of the money distributed among the
shareholders, and the Board of Directors may each year determine the
percentage or the maximum amount out of the Company’s total income to be
divided among needy members.
Chapter 7– Officers' Insurance, Indemnification and Waiver of Liability
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57 Officers' insurance
57.1 The Company may insure the liability of its officers solely in accordance with
the provisions of this chapter.
57.2 The Company may engage in a contract to insure the liability of an officer of
the Company for any liability imposed on him due to any action taken by him
by virtue of his service as an officer, in respect of each of the following
cases:
A. Breach of the duty of care towards the Company or towards any other
person;
B. Breach of fiduciary duty of care towards the Company, provided that the
officer acted in good faith and had a reasonable ground to believe that the
action would not harm the welfare of the Company;
C. Financial liability imposed on the officer in favor of another person.
57.3 The Company may not engage in a contact to insure the liability of its officers
in respect of each of the following cases:
A. Breach of fiduciary duty towards the Company, except where the
officer acted in good faith and had a reasonable ground to believe that
the action would not harm the welfare of the Company;
B. Breach of duty of care done with intent or recklessly;
C. Any action done with the intention of making unlawful personal gain;
D. A fine or ransom imposed
58 Indemnification of Officers
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58.1 The Company shall indemnify its officers solely in accordance with the
provisions of this chapter.
58.2 Advance Indemnification
The Company may undertake in advance to indemnify an officer, provided that
the undertaking is limited to a type of events which, in the opinion of the Board
of Directors, can be foreseen at the time the undertaking to indemnify is made,
except in the case of the events named in Article 57.3 above, and in the
amount the Board of Directors shall prescribe as reasonable, under the
circumstances.
58.3 Retroactive remuneration
The Company may indemnify an officer retroactively for all types of
events, except the events named in Article 57.3 above.
58.4 The Company may indemnify an officer for a liability or expense imposed upon
him following an action done by virtue of his office in the Company, as follows:
A. Financial liability imposed upon him in favor of another person pursuant to a
judgment, including a judgment awarded by compromise or arbitrator’s award
approved by the court.
B. Reasonable costs of litigation, including advocate’s fees, incurred by the officer
or awarded against him by the court in proceedings brought against him by or on
behalf of the Company, or by another person or on a criminal indictment from
which he is acquitted, or on a criminal indictment in which he is convicted of an
offense which does not require criminal intent.
59 Waiver of liability
59.1 The Company may waive the liability of any officer for breach of a duty of care
towards it solely in accordance with the provisions of this chapter.
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59.2 The Company may waive all or any part of an officer’s liability in advance and
retrospectively, for damage resulting from breach of duty of care towards the
Company.
59.3 Notwithstanding the aforesaid, the Company shall not waive any officer’s
liability for any of the following cases:
A. Breach of fiduciary duty towards the Company;
B. Breach of duty of care done with intent or recklessly;
C. An action done with the intention of making unlawful personal gain;
D. A fine or ransom imposed
Chapter 8– Dissolution and Reorganization of the Company
60 Dissolution
60.1 Upon dissolution of the Company, whether voluntary or otherwise, the
Company’s surplus assets, except the copyright assigned to the Company by
the shareholders, shall be divided among the shareholders pro rata to each
shareholder’s portion of royalties paid by the Company during the period of
at least 10 years preceding the dissolution, according to information existing
in the Company records.
60.2 Upon dissolution of the Company, the rights (if any) assigned to the
Company by any shareholder, or which are under the control of the
Company due to him being a shareholder, shall be returned to the
shareholder or to the shareholder’s personal legal representative or lawful
heirs.
61 Reorganization of the Company
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61.1 Upon the sale of the Company’s assets, the Board of Directors, or the
liquidators (in the case of dissolution), if so empowered by a resolution
passed by the Company’s General Meeting by simple majority, may receive
fully or partially paid up shares, debentures or other Company securities of
another company, Israeli or foreign, whether incorporated or about to
incorporate for the purpose of purchasing the Company’s assets or any part
thereof, and the Board of Directors (if the Company profits allow) or the
liquidators (in the case of dissolution) may divide such shares or securities or
any other Company assets among the shareholders, without realizing them,
or deposit them in the hands of trustees in the name of the shareholders.
61.2 The General Meeting may resolve, by resolution passed thereby by a simple
majority, on assessment of securities or of the assets mentioned above, at
such price and in such manner as the General Meeting shall decide, and all
shareholders shall be obligated to accept the assessment or the division so
authorized, and to waive their rights in this matter, save, in the event the
Company is dissolved or is in the process of dissolution, such legal rights (if
any) which according to the provisions of law cannot be modified or deviated
from.
61.3 The provisions of Article 60.2 shall apply, mutatis mutandis, with regard to
reorganization of the Company.
Chapter 9– Miscellaneous
62 Accounts
The Board of Directors shall ensure that books of account are kept for:
1. Money received and expended by the Company for the purposes such money was
received or expended.
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2. The Company’s expenses and undertakings.
62.1 The books of account shall be kept at the Company's registered office or at
such other place as the Board of Directors sees fit, and shall at all times be
open for inspection by the members of the Board of Directors subject to the
provisions of Article 37.9.
62.2 The Board of Directors shall decide from time to time to what extent, when
where and under what conditions and regulations Company shareholders who
are not directors may examine the Company books. Shareholders who are not
directors shall not be entitled to examine the Company books, accounts or any
other Company documents, except where the law so authorizes or when
permission is granted by the Company’s Board of Directors.
63 Notices
63.1 A notice or any document may be delivered by the Company to any
shareholder appearing in the Company’s register of shareholders in one of
the following manners:
Personally , by post, by facsimile or by electronic mail. Any notice shall be
addressed to the address recorded in the Company's shareholders register.
63.2 With regard to shares having joint owners, notice shall be delivered to the
person whose name appears first in the shareholders’ register, and any
notice so delivered shall be deemed a sufficient notice to all joint
shareholders.
63.3 Any shareholder registered in the shareholders’ register having an address in
Israel or abroad shall be entitled to have any notice which he is entitled to
receive under these Articles or by law sent to him at such address. Apart
from the aforesaid, any person not registered in the shareholders’ register ,
shall not be entitled to receive notice from the Company.
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63.4 Any notice or other document served or delivered to a shareholder in
accordance with these Articles shall be deemed to have been duly served
and delivered for all shares held by such a shareholder (whether held alone
or jointly with others), even if such shareholder was deceased at the time, or
became bankrupt, or under dissolution order, or a trustee or liquidator or
receiver was appointed for such shares (whether or not the Company knew
of it), until such time as another person is registered in the shareholders’
register in place of such member, and service or delivery of such aforesaid
notice or document shall be deemed sufficient service or delivery for any
person having rights in such shares.
63.5 Any notice or other document sent by the Company shall be deemed to have
been received:
If sent by post within 48 hours from the time of the delivery of the letter to the
Post Office, if sent by facsimile at the time it was sent, if sent by electronic
mail at the time of the sending of the electronic mail.
63.6 The unintentional failure to dispatch notice to a member of a General
Meeting or a member’s failure to receive such notice regarding a meeting or
any other notice shall not affect the validity of any resolution passed at the
meeting or cause cancellation of processes based on such notice.
63.7 Any shareholder who is a member of the Board of Directors may waive his
right to receive notice or to receive notice at a certain time, and may agree
that the General Meeting or meeting of the Board of Directors, accordingly,
shall convene and take place notwithstanding the fact that he has received
no notice thereof, or notwithstanding the fact that notice was not served at
the time required, subject to the provisions of any law prohibiting such waiver
or consent.
63.8 If a shareholder has no registered address in Israel and has not given the
Company an address to which notice may be sent, and contact with the
member has been lost, the Company shall advertise for such member in one
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of the newspapers in Israel, asking that he provide the Company his
address. If the member has not responded within 21 days of the date of
publication of such notice, the Company shall advertise another such notice.
63.9 If the shareholder has not responded to the second notice within 21 days of
publication, the provisions of Article 13.1.8 shall apply.
63.10 Notice of a General Meeting shall be served on all Company shareholders in
accordance with the provisions of these Articles, save such shareholders
who have no registered address in Israel or have not provided an address for
service of notice in Israel. No other person shall be entitled to receive notice
of the convening of any General Meeting.